Alabama business roundup: Headlines from across the state

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Here’s a roundup of some of the weekend’s top business headlines from across the state: Alabama businesses hope to nip beverage tax in the bud

The head of Buffalo Rock Co. said a soft drink tax proposed to help fix the state’s General Fund budget shortfall would hurt the state’s economy.

“It’s a job killer and would have an enormous trickle effect throughout our economy,” said Matthew Dent, president and chief operating officer of the Birmingham-based company, which employs 2,100 people.

Buffalo Rock is one of about 300 partners signed up for the Stop the Alabama Beverage Tax campaign.

They include bottling companies, retailers, restaurants, trade associations, city governments, schools and others.

They launched a website, Facebook page and advertisements.

Dent said the main goal is to tell people what the group believes would be the harm done by such a new tax.

Legislators have not introduced a soft drink tax bill, but Gov. Robert Bentley included it in his proclamation calling the special session.

It would be the biggest component in the governor’s proposed $302 million tax increase package.

It’s not a first option for the governor, who said he prefers an alternative — repeal of the state income tax deduction for Social Security taxes paid.

Either proposal would raise about $180 million annually.

Acting Finance Director Bill Newton said the soft drink tax estimate is based on a tax of five cents per 12 ounces.

That would add 60 cents to the cost of a 12-pack and about 28 cents to the cost of a 2-liter bottle.

Soft drinks are now taxed at the general sales tax rate — a 4 percent state tax plus local taxes.

Aside from the added cost of a new tax, Dent said any tax that singles out one industry is the wrong approach.

“Buffalo Rock would support a broad-based tax that’s fair and equitable that everybody participates in,” Dent said.

The Legislature is in recess and will resume the special session on Aug. 3.

Some legislators have indicated that the soft drink tax and the repeal of the Social Security deduction don’t have much support.

The governor has also proposed raising the maximum business privilege tax, raising the tax on tobacco products, adding a new tax on vapor cigarettes and some budget reforms.

House Speaker Mike Hubbard, R-Auburn, said it was too early to say which proposals have a chance to pass.

“I’m just not in a position to talk about which ones we’d move forward with,” Hubbard said. “We have discussed all of them at length. In the legislative process, it’s all about putting together a package that you can get the votes for.”

Legislators have been meeting in groups during their recess and are trying to find some consensus.

Bentley vetoed the budget legislators passed in June. It would have cut General Fund spending 11 percent, to $1.6 billion.

Bentley has proposed a plan that would spend $1.9 billion from the General Fund.

Officials say that a budget without new revenue would force cuts in services to the poor and the mentally ill, law enforcement, prisons, courts and other areas.

“It’s a hard decision legislators have,” said Virginia Bear, executive director of the Alabama Beverage Association, a bottlers’ organization. “We would hope the solution is fair and broad-based and equitable. A beverage tax is certainly not because it singles out one industry.” REEL wins Airbus contract, plans first U.S.-based subsidiary at Mobile Aeroplex at Brookley

France-based REEL Group is establishing its first U.S. facility with 4,500-square-feet of office, warehouse, and workshop space at Mobile Aeroplex at Brookley.

Monday’s announcement is in direct response to REEL Service Division being awarded the jigs and tools maintenance service provider contract for the Airbus U.S. Manufacturing Facility, also located at Brookley.

The newly formed subsidiary, dubbed REEL USA Corp., is expected to create more than 20 full-time positions, and its lease with Brookley allows for expansion as needed.

“(REEL’s) expertise in the area of advanced manufacturing processes is a great asset to the growing manufacturing sector in Mobile County and, in particular, to the Airbus U.S. Manufacturing facility at the Mobile Aeroplex at Brookley. We look forward to a partnership with the company and are proud to be the chosen location of REEL’s first U.S. work site,” Mobile County Commission President Jerry Carl said in a prepared statement.

Financial terms of the deal were not disclosed.

Roger Wehner, executive director of the Mobile Airport Authority, said although Airbus’ state-of-the-art A320 final assembly hangar is “expertly designed,” the actual task of aircraft assembly “will happen via the hands of well-trained employees.”

“The jigs and tools elevate them and facilitate the task, and REEL will help them maintain that critical foundation.  While REEL will support the Airbus production facility, it also constitutes a critical capability set in our constant evolution, and we know this differentiates us from other communities,” Wehner said.

Toulouse, France-based Airbus will launch production this month at its first A320 final assembly line on U.S. soil at Brookley in the company’s ability to efficiently fill the mounting backlog for the popular single-aisle aircraft. The $600 million facility is expected to deliver its first Mobile-assembled aircraft to JetBlue in the second quarter of 2016 and employ about 1,000 people when it reaches full annual production of 40 to 50 aircraft by 2018.

Meanwhile, REEL Service Division provides maintenance; installation and commissioning; studies, consulting and expertise; improvements, modifications and compliance; assistance and training. REEL Group member COH, founded in 1969 and located in Quebec, Canada, will also support REEL USA Corp. in its development.

For more than seven decades, REEL has specialized in custom-made handling systems for sectors where safety and reliability are major concerns, including nuclear energy, aluminum production, aeronautics, defense and offshore systems. The conglomerate has exhibited particular expertise in the aviation sector by providing and maintaining aircraft docking systems, telescopic platforms and engine-handling systems.

Mobile Mayor Sandy Stimpson called REEL a “world-class company” and a “great addition to our community as we seek to expand our advanced manufacturing capability.”

“I particularly want to commend the Mobile Airport Authority for working closely with the company to bring new life to an existing building at the Aeroplex. Mobile is open for business, and this announcement by REEL is validation of that fact,” Stimpson said in a prepared statement.

Birmingham Business Journal: Alabama counties rank high for manufacturing job growth

Alabama is one of the few states where manufacturing is still king, due mostly to the ever-growing presence of the automotive industry.

Headlight Data recently reported its county-by-county rankings for manufacturing job growth, and many Alabama counties found their way into the upper echelon of the 2,746 counties ranked on net change from 2013 to 2014.

Morgan County led all Alabama counties – ranking 51st overall for job growth in the manufacturing sector by adding 758 jobs from 2013 to 2014.

Tuscaloosa County – home to Mercedes-Benz U.S. International’s production facility – ranked 69th overall with a 5.3 percent growth in manufacturing jobs from 2013 to 2014. This equals to 665 jobs added over the year.

Jefferson County saw a 1.7 percent growth in the manufacturing sector, which helped the county rank 160th overall for positive growth.

However, last year leading up to 2015 has been a difficult stretch for manufacturing jobs in Jefferson County, with Walter Energy declaring bankruptcy and U.S. Steel Corp. threatening to lay off nearly all of its workforce in Fairfield.

Other counties have grown as automotive suppliers flock to Alabama, such as Talladega County, which is home to Honda Manufacturing of Alabama. The county ranked 137th overall for growth, getting a 4.8 percent bump over 2013 to 2014.

Birmingham Business Journal: Bentley orders “no weapons” signs removed from Alabama rest areas

Alabama gun owners will now be allowed to bring their firearms onto rest area property owned by the state.

Gov. Robert Bentley ordered the Alabama Department of Transportation to comply with state law by removing signs that say “no weapons,” according to a report from NBC 13.

The signs were taken down on Saturday afternoon.

Bentley made the announcement on Friday via his Twitter account. His office has also said that ALDOT is cooperating with the sign removal.

Dothan Eagle: Farley Nuclear should generate power for many more years

If the Joseph M. Farley Nuclear Plant near Columbia was decommissioned today, operating company Southern Nuclear said the plant will have still generated enough electricity for every Alabama Power residential customer to have electricity for 25 years.

But residents apparently shouldn’t stress over Farley going out of operation anytime soon. According to Southern Nuclear, licenses approved through the U.S. Nuclear Regulatory Commission (NRC) allow the Farley plant’s two nuclear reactors to continue operation well into the next couple of decades. After then, additional 20-year renewals would still be possible.

Farley, which is owned by Alabama Power but operated by Southern Nuclear, opened for commercial operations in 1977. According to Southern Nuclear spokesperson Lynnmarie Flowers, Farley Unit 1 was relicensed in May 2005 to operate until June 25, 2037, and Unit 2 was granted licensure through March 31, 2041.

Initial plant licenses at Farley were granted for a period of 40 years under the Atomic Energy Act and NRC regulatory process.

Flowers said plant maintenance, upgrades, and repairs are routinely made to ensure that Farley operates safely for years into the future. She said the most significant of the repairs was the replacement of the steam generators in the 1990s.

“The NRC requires aging management and maintenance programs to monitor overall plant condition and initiate actions as appropriate to assure that safety is maintained,” Flowers said in an email.

“This replacement represented a significant cost to the company and demonstrates Farley’s commitment to safe, reliable power.”

According to Southern Nuclear, nuclear technology is used in the production of energy, and is also used in the medical field and for exit signs in schools and office buildings. Nuclear power also helps relieve energy cost uncertainty caused by natural gas and coal prices, according to Southern Nuclear.

Southern Nuclear reports that about 19 percent of Alabama Power’s electricity is generated at Farley. Alabama Power reported in 2012 that in all, the company has an annual economic impact of $2.2 billion.

According to the U.S. Energy Information Administration (EIA), Farley’s two reactors, combined with the three reactors at Browns Ferry Nuclear Plant near Decatur, produce about a fourth of the state’s electricity.

Alabama is one of the 10 largest generators of electricity from nuclear power in the nation, according to the EIA. Farley is among 100 nuclear power reactors operating in 31 states, making nuclear power the third leading source of baseload electricity after natural gas and coal, according to Southern Nuclear.

Farley is also one of southeast Alabama’s largest employers, with about 950 workers that include engineers, mechanics, control room operators, lab technicians, instrument and control technicians, electricians and security officers.

Flowers said Southern Nuclear has not decommissioned any plants in the company’s nearly 40 years. Plants that are decommissioned through the NRC often require years-long processes of cleaning radioactively contaminated plant systems and structures and the removal of radioactive fuel, according to the NRC.

According to Flowers, fuel from the reactors at Plant Farley is stored in both a spent fuel pool and in dry cask canisters.

“The intent is for the fuel to be shipped to the Department of Energy when a repository becomes available. Until that time, the fuel can remain stored in the spent fuel pools or canisters safely for the entirety of plant life or beyond, if required,” she said.

Flowers said Farley has adequate space for at least two more units on the 1,850 acres on which the nuclear plant is located, but that there are no current plans to expand there.

According to Southern Nuclear spokesman Brandon Smith, Southern Nuclear does have intentions of constructing two additional units at Alvin W. Vogtle Electric Generating Plant in Waynesboro, Ga.

Waynesboro is about five hours away from Dothan.

Farley’s namesake is the late Joe Farley, who served as Alabama Power’s president from 1969 to 1989.


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