Here’s a roundup of some of the top business headlines from across the state this week:
Total investments by Japanese automakers in their U.S. operations reached nearly $43 billion last year, according to new data from the Japan Automobile Manufacturers Association.
That’s up from $40.6 billion in 2013.
Direct employment at the automakers also grew to 91,122, up from 82,816 the previous year.
“These figures demonstrate the ongoing commitment of Japanese automakers to the U.S. auto market and they signal a new day in Japanese brand auto manufacturing in America,” Ron Bookbinder, General Director of JAMA USA, said in a prepared statement.
In Alabama, Japan’s Honda and Toyota each have a major manufacturing presence, and they have been part of the growth.
Honda’s $2 billion, 4,000-worker auto assembly plant in Talladega County recentlykicked off production of the redesigned 2016 Pilot SUV and officially opened a $71 million, highly-automated engine assembly line.
During the past three years, the plant has announced new investments of more than $508 million for projects to improve flexibility, enhance quality and increase production. It also has added more than 450 jobs.
As for Toyota, the automaker’s Huntsville engine plant last year marked an $80 million expansion project and the production of its 3 millionth engine.
It is the only Toyota plant worldwide to produce four-cylinder, V-6 and V-8 engines under one roof.
Alabama Commerce Secretary Greg Canfield told economic developers in the state today the Alabama Department of Commerce will add a new workforce division and is preparing to present the revised state economic development plan to Gov. Robert Bentley.
Speaking to members of the Economic Development Association of Alabama (EDAA), Canfield said the most recent legislative session not only armed economic developers with better incentives to help recruit and expand industry and be more competitive with other states, but it also revamped the organization of the Department of Commerce.The new Workforce Development Division of the commerce department will be led by Ed Castille, the longtime leader of the state’s AIDT worker training initiative. Castille will become a deputy secretary of commerce and will retain his job as the head of AIDT.
“This is not about meeting institutional needs. This is about meeting the needs of business and industry,” Canfield said.
In addition to AIDT, the Workforce Investment Division and the Workforce Development Division of the Alabama Department of Economic and Community Affairs will move from ADECA to the new Department of Commerce division. The state’s 10 workforce development councils will realign from the Alabama Community College System to the new division.
“Workforce readiness is a key issue facing every advanced manufacturer in the U.S.,” Canfield told EDAA members. “We want to make sure the state is properly aligned to address this need.”
More change ahead
The realignment is one of many proposals the state is adopting from the governor-initiated Alabama Workforce Council, which is made up of leaders from the private sector and chaired by Zeke Smith of Alabama Power.
The Alabama Department of Commerce’s Business Development Division will continue to focus on recruitment and retention of industry, international trade, the state’s film office and other traditional functions of the department.
In addition to the new organization, Canfield said the Department of Commerce is in the process of updating Accelerate Alabama, an economic development plan adopted three years ago.
The plan identified the key industries the state is targeting in its recruitment initiatives, recognized areas for helping retain industry in the state and added a new focus on growing innovative companies from within while attracting research and development jobs to the state.
Forecast for economic growth
Since Accelerate Alabama was adopted, Canfield said the state has announced 55,736 new or future jobs and $13.2 billion in capital investment.
Canfield said Accelerate Alabama 2.0 will build on that by better aligning the state’s workforce training initiatives with those targeted industries. It will also seek to improve on AdvantageSite, the state’s site certification program led by the Economic Development Partnership of Alabama, by certifying those sites for specific industries.
Canfield said the plan will include ways for the state to work more closely with local communities to work with existing industry and will include ways to expand biomedical and life science industries in the state.
“We’re going to make our commitment to that field a little more robust going forward,” Canfield said.
In an interview after his remarks, Canfield echoed Gov. Bentley’s claim earlier this week that the new incentives are spurring increased interest in the state from prospective companies.
“The response from the private sector and from site consultants indicate to us we’re in the right place to be in terms of how we’re going to be able to incentivize projects going forward,” he said.
Alabama Newscenter: Alabama poised to grow in the distribution center industry
A leading site consultant said Alabama is well-positioned to add a number of new distribution centers.
Andy Mace, consulting managing director with Cushman & Wakefield, said all of the key variables needed for distribution exist in Alabama and cities like Birmingham compare favorably to Atlanta and other distribution hubs.
Mace is familiar with Alabama, having worked with Thyssenkrupp’s location to Mobile County and other projects in the state. But he said even he was surprised to learn how well the state stacks up to competitors for distribution center projects.
“The rest of the country doesn’t see Alabama as a distribution center state,” Mace told members of the Economic Development Association of Alabama at its conference this week.
But maybe they should, Mace said, when you consider:
- A trucker can reach 33 percent of the U.S. population within a one-day truck drive from Alabama.
- Within a two-day truck drive, a truck from Alabama can reach 78 percent of the U.S. population.
- Alabama ranks 11th lowest in the nation in total cost to reach the entire U.S. population (based on costs for one truckload).
- In the key comparisons, Birmingham comes out slightly better than Atlanta.
- Alabama has multiple interstates, an expanding state port, five railways and several intermodal facilities.
“Alabama is much more competitive than we would have expected,” Mace said.
Moreover, when you look at global distribution trends, Alabama is well-positioned there, too, Mace said.
The influence of e-commerce
The rise of e-commerce and the fulfillment centers that support the websites has put a premium on land and buildings near intermodal facilities because of the shipping containers that move through them. Alabama has sites near intermodal facilities.
Although e-commerce accounts for only 10 percent of retail sales, 30 percent of the new distribution centers being built are tied to fulfillment centers for e-commerce, Mace said. That’s a growing trend the state should take advantage of, he said.
With the expansion of the Panama Canal, the Southeast could see up to 10 percent growth in shipping. The Port of Mobile is already preparing for that growth and the rest of the state’s infrastructure should also be primed, Mace said.
Container shipping has surpassed pre-recession levels and continues to grow. Changes in trucking laws, fluctuating gas prices and the growth of industries that effectively use container shipping have contributed to the rise.
Mace said the Norfolk Southern Birmingham Regional Intermodal Facility in McCalla is particularly well positioned to attract distribution centers. The facility saw 50 percent growth in 2014 and still has plenty of capacity to add more business, Mace said. There are industrial sites still available in the Jefferson Metropolitan Park-McCalla and other industrial parks not far from the facility.
The Port of Mobile saw a 10 percent increase in shipping container business last year, which is another good sign for intermodal, Mace said.
The Alabama Department of Commerce has identified distribution centers as a targeted industry. Armed with new incentives, the state can, and Mace said should, make a play for more companies to locate or expand distribution in the state.
Montgomery Advertiser: Alabama jobless rate holds steady in June
Alabama’s unemployment rate held steady at 6.1 percent in June, according to preliminary figures released Friday by the state. The jobless rate had ticked up for two straight months since falling to 5.7 percent in March.
State leaders to an overall increase in the number of jobs statewide in that time, an increase that has been outpaced by an influx of new job-seekers.
Still, the state lost 1,900 wage and salary jobs in June. Alabama’s monthly numbers were buoyed by 2,300 new jobs in the construction industry and 1,600 new workers in the leisure and hospitality sector.
“It is not uncommon to see unemployment rise or remain steady during the summer months, usually as a result of an increase in the labor force as students and graduates search for work, and teachers and other school employees are not employed,” Alabama Department of Labor Commissioner Fitzgerald Washington said in releasing the numbers.
The nationwide rate fell to 5.3 percent in June.
Elmore County had the state’s second-lowest jobless rate at 5.4 percent. Only Shelby County was lower.
Autauga County ranked No. 5 at 5.7 percent, and Montgomery County stood at No. 28 with a rate of 6.8 percent.
The county-level numbers are not adjusted for seasonal shifts in the job market and tend to be higher than the statewide rate.
The Montgomery metro area added 1,200 non-agricultural workers last month, according to the state.