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 Newscenter: Kamtek expansion to swell to $530 million, create 354 jobs

Kamtek International officials said today the company’s Birmingham expansion plans will total $530 million in capital investment and add 354 jobs by 2019.

The automotive supplier won Birmingham City Council approval this morning to purchase 78 acres in Valley East Industrial Park where it plans to build an $80 million, 148,000-square-foot high-pressure aluminum casting plant, creating an initial 120 jobs.

That plant is set to be completed by July 1, 2016, in time to start producing parts by the end of that year. The project could grow to 400,000 square feet by 2025, Kamtek officials said.

The subsidiary of Canadian-based automotive supplier Magna Ltd. has operated and expanded its stamping and assembly operations in the industrial park multiple times since locating there as the former Ogihara in 1997 to supply Mercedes-Benz in Vance. Magna purchased Ogihara in 2008.

Since the purchase, Kamtek has invested $473 million in Valley East Industrial Park, including the purchase of the vacant Del Monte warehouse and its 36 acres three years ago. Employment at the facilities has bloomed from 293 employees at the time of the Ogihara purchase to 922 today.

But officials said today more expansions are coming to the existing facilities. The investment eventually could top $530 million and create 354 jobs

Magna/Kamtek is one of the largest automotive suppliers in the world and it manufactures and supplies exterior and structural welded assemblies from its Birmingham facility to Mercedes-Benz U.S. International in Vance and several other automakers in the state and the Southeast.

The Alabama Department of Commerce, the City of Birmingham Mayor’s Office of Economic Development, the Jefferson County Commission, Jefferson County Economic and Industrial Development Authority, the Birmingham Business Alliance and Alabama Power worked closely with Kamtek to finalize expansion plans.

Kamtek has said it intends to use AIDT, the state’s workforce development entity, to prepare new hires to work at the plant.

“The expansion of Kamtek is yet another sign that the Birmingham region is a great place for advanced manufacturing facilities to locate and grow,” said Alabama Power CEO Mark Crosswhite, chairman of the board of the BBA. “Our city and our region are drawing companies from across the globe because of our superior workforce, excellent infrastructure, competitive costs, quality of life, and the outstanding level of support and cooperation we offer to business and industry.”

Kamtek said it hopes to start construction within the next few weeks in order to complete the new plant next summer.

Birmingham Business Journal: Bham City Council approves minimum wage increase to $10.10 in 2017

The Birmingham City Council on Tuesday passed an ordinance to increase minimum wage in the city to $10.10 an hour by July 2017.

The measure was proposed by Council President Johnathan Austin, who called for wages to increase to $8.50 in July 2016 and $10.10 in July 2017, according to a report from Fox 6.

Alabama currently has no set minimum wage. The federal minimum wage of $7.25 is applied statewide.

The ordinance also calls for minimum wage in the city to rise annually as the city’s cost of living goes up.

This comes after council members on Aug. 6 voted to increase the salaries of council members from $15,000 to $55,000 in 2017, following the next city council election.

AL.com: Alabama trucking company to pay $113,000 to workers after investigation

An Alabama trucking company has been ordered to pay $112,735 to employees after a federal investigation found them guilty of failing to pay its workers overtime.

The Department of Labor’s Wage and Hour Division found that Fitzhugh Contracting LLC, a logging and trucking contractor, paid 63 workers their regular pay rate, when the Fair Labor Standards Act requires that hourly workers receive their hourly rate plus half for all hours worked past 40.

“Employers need to understand and be aware that it is unlawful to underpay employees, misclassify them as independent contractors, or pay straight time for overtime to increase their profit margin,” Frank McGriggs, the Wage and Hour Division’s deputy regional administrator in Atlanta, said in a statement. “Other employers who may be paying workers in a similar manner should take note of this investigation and change their practices immediately.”

Fitzhugh Contracting LLC is located at 30513 Highway 43 S. in Gallion. The investigation also found that Fitzhugh misclassified 46 workers as independent contractors, which denied them certain wages and benefits. Fitzhugh also didn’t keep accurate records of hours worked.

Fitzhugh agreed to pay $56,367 in back wages plus the same amount in damages, bringing the total to $112,735.

AL.com: Alabama Revenue Department makes online tax payments more secure for retailers

The Alabama Department of Revenue is taking steps to make its online taxpayer portal more secure.

The site, My Alabama Taxes, or MAT, allows retailers to file state and some city and county sales, use, rental and lodging taxes while online. The system was launched in 2013 and, starting in July, will include additional security processes.

Now, users of MAT will be required to enter their log-on and password as well as a second entry that will require users to have an authentication code. Users will have an option of receiving the authentication code via text message or email.

Commissioner Julie Magee said while MAT is already a secure system, the boost will give users additional assurances their data is protected.

The code will be used to verify the user’s identity when logging on to MAT. Users will also be able to check a “trust this computer” box so that it will be saved for future log-ons.

ADR has also provided a video showing users a demonstration of the new system.

Opelika Now: Plenty of success stories among Alabama businesses

Last week we discussed the legendary story of Aflac. Three more remarkable business success stories are just as magnificent. Again, all three of these companies are Alabama born and raised fairytale ventures.

Alfa is Alabama’s largest property and casualty insurance company. Today, Alfa employs more than 2,300 people and has almost 450 agents in Alabama. It has 229 offices in Alabama, with an office in every county.

Alfa and its affiliates provide insurance in 11 states, with more than a million policies in force. Alfa is also Alabama’s leading provider of life insurance, with $27 billion of life insurance on the books.

Alfa was formed out of necessity less than 70 years ago. The Alabama Farmer’s Federation was established in 1921 to help farmers garner political power. During the 1920s, 30s and 40s, which spanned the Great Depression and economic catastrophe, Alabama farmers found it impossible to get fire insurance to cover their homes and barns. In 1946, the Farmers Federation formed a fire insurance company. Farmers put up $11,225 to start their own company. The rest is history.

Liberty National Life Insurance Company was founded in 1900 in Birmingham. During the next 60 years, it became the greatest business success story in Alabama insurance lore. As late as the 1960s, Liberty National had more life insurance policies on Alabamians than every other company in the world combined. It became one of Birmingham’s biggest businesses. It had a dominating presence on 20th Street, with a gigantic bronze replica of the Statue of Liberty on top of its distinguished building. The company had so many Alabamians insured for their burials, they figured they might as well own the funeral homes, too. So in 1944 the company formed Brown Service and established ownership in most of the funeral homes in the state. In the 1970s, Liberty National acquired Globe Life and created Torchmark Corporation as a holding company.

Liberty National was founded by Frank P. Samford. Mr. Samford was born in Troy in 1893. He was the son of a judge and a grandson of Gov. William J. Samford. He graduated from Auburn in 1914.

Frank Samford became very wealthy as the president of Liberty National for over 30 years, especially from his stock ownership in the company. A good many of his associates and business partners also gained tremendous wealth throughout the phenomenal grown of their Liberty National stock. Mr. Samford gave so much of his wealth to Howard College in Birmingham that the school he endowed moved to its beautiful campus in suburban Homewood in the early 1960s. Samford University is named in his honor, and rightfully so. He and Liberty National stock paid for the gorgeous elite private college in Homewood.

Another magnificent Alabama business story has been EBSCO. The company is named after its founder, Elton B. Stephens. Thus, EBSCO is an acronym for the founder Elton B. Stephens.

Elton Stephens was born and raised in the small Barbour County hamlet of Clio. Remarkably, he and George Wallace were raised in Clio during the same era. So arguably it could be said that one of the greatest businessmen in Alabama history and the state’s best-known politician grew up in the same small southeast Alabama village at the same time.

Both Stephens and Wallace sold magazines door-to-door in the summer to help work their way through college. The idea resonated with Stephens. He started a business selling magazine subscriptions to military bases. Stephens started this business with his wife, Alys Robinson Stephens, in 1944. Now, 70 years later, EBSCO is a global company with nearly 6,000 employees and 50 different companies operating in 23 countries. It has a tremendous diversity of business interests, which include information services, publishing and digital media, outdoor products, real estate and manufacturing.

EBSCO is one of the state’s largest private companies. When Elton Stephens died in 2005 at age 93, he was one of the wealthiest men in America. He was listed as the 66th wealthiest person in the country, with an estimated net worth of $4 billion.

However, he is best known for his magnificent philanthropy in his later years. Some of his gifts included the Alys Robinson Stephens Performing Arts Center at UAB, as well as the Elton B. Stephens Science Center at Birmingham-Southern. He gave $15 million to revive the Alabama Symphony Orchestra. The Stephens family is also responsible for developing the futuristic eco-friendly pristine developments of Mt. Laurel in Shelby County and Alys Beach on Florida’s Gulf Coast.

Yellowhammer News: BCA warns bill ‘targets’ Alabama businesses with tax hike

A bill being considered by the Alabama Senate would require any corporation doing business in Alabama to file a “unitary” tax return with the state.

Here’s how current Alabama law works: If a company based in another state does business in Alabama they file and pay taxes only on the income earned in Alabama based on a formula applied by the Alabama Department of Revenue (ADOR).

Under the bill, SB51, companies and their affiliated entities would need to file all of their income with ADOR, whether or not it was earned in Alabama, and the department would determine the amount of taxes due. The statute would also apply to Alabama-based businesses who do commerce in other states.

The bill has long been a goal of many Democratic lawmakers who say corporations based in other states but doing business in Alabama have been avoiding paying their fair share in taxes by exploiting a loophole in the law.

Opponents of the law say none of Alabama’s surrounding states, with whom we are often competing for industry, has a similar provision, so it would keep new companies from coming to the Yellowhammer State.

The Business Associations’ Tax Coalition (BATC), a coalition of business and trade associations representing every major classification of business in Alabama says the bill also gives the Alabama Department of Revenue unprecedented authority to “unilaterally determine tax policy and creates a bureaucratic nightmare resulting in delays and confusion for the taxpayer.” When Georgia considered implementing required combined reporting it found it would cause job losses and dropped the idea.

The Legislative Fiscal Office estimates the bill would increase revenues to the Education Trust Fund by $30 million annually.

Should it pass, the law would be applied retroactively to the beginning of 2015.

“This Senate legislation singles out winners and losers while targeting the business sector in Alabama and placing a disproportionate burden on business,” said BCA president and CEO William J. Canary in a “alert” to the Association’s members. “SB51 is clearly a deterrent to job creation. It expands government and the powers of the Alabama Department of Revenue while increasing business taxes.”

With much of the business community against the bill, Montgomery insiders contend it will not be successful in the Special Session, but warn it could pop up again.

 

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