Advanced Manufacturing

Advanced Manufacturing, Current Issue, Features, Features, November 2015

Kentucky’s shiny aluminum scenario

Logan Aluminum’s news in late October that its massive Russellville facility will join Kentucky’s growing ranks of automotive suppliers is the most recent in a series of facilities announcements further securing the commonwealth’s position among the world’s top aluminum production centers.

“Strong, lightweight materials are quickly becoming standard in vehicle production, and Logan Aluminum’s expanded operations contribute to Kentucky’s position as a global leader in the aluminum industry,” Gov. Steve Beshear said during the Oct. 28 facilities expansion announcement.

The facts are clear: Kentucky’s aluminum industry is booming. And it is growing from a position of strength. Kentucky ranks first nationally in aluminum production capacity, said Mandy Lambert, business development commissioner at the Cabinet for Economic Development. It leads the country in aluminum jobs and economic impact per capita, according to 2013 national Aluminum Association statistics.

Manufacturing and wholesaling operations of the aluminum industry in Kentucky are responsible for $3.8 billion annually in direct economic output, the Aluminum Association reports. When supplier and induced impacts are factored in, aluminum’s effect grows to $7.01 billion annually, accounting for 4.04 percent of the gross state product.

Kentucky currently has 151 aluminum-related facilities – from smelters and mills to manufacturers of end-user goods – that employ 18,201 direct employees, according to the Cabinet for Economic Development.

In 2014, there were 18 aluminum-related new or expanding facilities announcements in Kentucky, accounting for more than $577 million in investment and 650 new full-time jobs, said Jack Mazurak, communications director for the cabinet.

Notable among these: a $350 million investment to upgrade the Aleris aluminum coiled sheet manufacturing facility in Lewisport, which is currently underway in Hancock County; and a new $155.9 million, 242,000-s.f. aluminum sheet manufacturer on 50 acres of Bowling Green’s Kentucky Transpark that is projected to bring 80 jobs whose salaries average $65,000.

That new Bowling Green facility, Quiver Ventures LLC, represents a partnership between two aluminum companies: European-based Constellium and Japanese-based UACJ Corp.

Logan Aluminum has long produced rolled aluminum sheet for the can market, especially soft drinks. The $290 million investment Logan announced in late October will expand and upgrade that facility, add 190 jobs, increase capacity and allow it to produce heavier gauge materials, including auto and truck body sheet.

The prime driver reason for all this growth is the automotive industry’s increasing demand for aluminum body frame, which is lighter than steel.

Long-expected automaker shift happening

“We’re really at a special and interesting time for the industry nationally,” said Matt Meenan, director of public affairs for the Arlington, Va.-based Aluminum Association. “For a long period of time there’s been an expectation of being able to look to automakers to use more aluminum. And that’s something that has been ongoing for more than 40 years, sort of on a continual-growth basis.

“But what happened in the last 12 months, with the launch of the new Ford F-150 (pickup), which is really the first mass-market vehicle to go to an all-aluminum body, has been a huge inflection point for us,” Meenan said.

Nationally, in the last two and a half years, Aluminum Association member companies have committed $2.3 billion in domestic plant expansions to meet the demands of this new automotive opportunity, he said.

Aluminum bodies have been used for years in luxury cars – Audi, Jaguar, Land-Rover, Mercedes-Benz – because their low weight yields more energy-efficient vehicles. It’s estimated aluminum body structures can provide a weight savings of up to 50 percent compared to mild steel structure.

“For a long time, luxury cars had been using aluminum, and it’s really used (to some extent) in every car,” Meenan said. “But for the largest-selling vehicle in America to go to an aluminum frame and body is a big, big deal for us.”

The F-150 is just the first of what’s anticipated to be many mainstream models to adopt an aluminum body, in pursuit of greater fuel efficiency. Ford has indicated plans to convert its F-250s, F-350s and F-450s to aluminum body structure for 2017. The Kentucky Truck Plant in Louisville produces those models.

A recent North American Light Vehicle Content study by consulting firm Ducker Worldwide – known within the aluminum industry as the Ducker Report – projected an unprecedented 20-fold escalation in aluminum sheet demand from the automotive industry in the coming decade: from less than 200 million pounds (100,000 tons) in 2012 to nearly 4 billion pounds (2 million tons) by 2025.

Biggest change since the aluminum can

“This is a once-in-a-career type opportunity,” said Andy Ishmael, vice president of North American Automotive for Aleris, who oversees production in Lewisport. “The growth aluminum is going to have from automotive is the biggest change in the aluminum marketplace since (the development of) the aluminum can.”

Lewisport produces aluminum coils – think spools of rolled aluminum sheet weighing between four and 10 tons – that its customers further process into end products, including automotive body sheet, building construction materials, transportation systems and more, Ishmael said.

With the $350 million investment currently underway – which will add roughly 60 new jobs and 480 million pounds of capacity to produce automotive body sheeting in 2017 – the site will shift its primary focus to producing aluminum for the automotive sector, Ishmael said. In fact, when the facility upgrade is complete, Lewisport will become Aleris’s first North American site equipped to produce wide aluminum auto body sheet.

That kind of capital investment, Ishmael said, speaks volumes about the company’s faith in the future demand for its product – and for its staying power in Kentucky and in Hancock County specifically.

“We don’t make a $350 million investment like this without working with and having some real partnerships worked out with our customers. So this isn’t a ‘build it and they will come’ scenario. We have contracts to back this work and this investment we’re making. Otherwise we wouldn’t have jumped to such a large investment,” he said.

For Lewisport and Hancock County “an investment of this type is huge,” Ishmael added. “There is huge pride and emotion (there) about the future of that facility being set on such a growth platform, and the big investment that we’re making there.”

In addition to Aleris, Kentucky is home to several major aluminum facilities: Century Aluminum has plants in both Hawesville and in Sebree – where it operates one of the United States’s few remaining smelters of primary aluminum. Russellville’s Logan Aluminum, which already employs about 1,000 people, has been a worldwide leader in supplying the aluminum can market; it provides aluminum for 45 percent of the aluminum cans made in North America. And in Berea, Novelis’s aluminum recycling facility is one of the largest of its kind in the world.

With that infrastructure in place, and the benefits of the state’s strong automotive industry presence – Kentucky ranks third nationally in light vehicle production and second in light truck production – there’s no reason to think that commonwealth aluminum manufacturers won’t be primed to capitalize on the growing automotive market demand.

Industry likes cheap power, market access

“With much of the aluminum industry expansion being driven by the automotive industry,” Lambert said, “Kentucky’s proximity to key suppliers and auto manufacturers in the Midwest and South, along with many other industries and markets along the East Coast, will continue to be a key advantage for companies located here.”

While projected automotive demand acceleration for aluminum is big news in the industry right now, the factors behind aluminum’s popularity and utilization across so many sectors – from foil and cans to building materials, personal electronics, aircraft construction and even the Mars Rover – are the same as they’ve always been: It is lightweight, durable, corrosion resistant and infinitely recyclable.

In fact, today fully 70 percent of U.S. aluminum production utilizes recycled source material, said the Aluminum Association’s Meenan, up from just 30 percent 20 years ago.

The smelting process to produce primary aluminum from bauxite ore is somewhat expensive, as it demands an extremely high electricity load – 400 kA or above – to drive the electrolytic reduction step that breaks the aluminum-oxygen bond in alumina to yield pure liquid aluminum. With the cheapest electricity in the eastern United States, Kentucky’s logistics advantages are especially attractive for aluminum suppliers.

To keep production costs down – and reduce waste – many manufacturers today use recycled aluminum as their primary source material. Aleris’s Lewisport facility gets aluminum from the Real Alloy recycling facility in Morgantown, Ky., among others, and does some of its own recycling as well, said Ishmael.

Using recycled aluminum instead of producing new primary aluminum reduces manufacturing energy demand by 92 percent, according to the Aluminum Association. Thanks to aluminum’s unlimited recyclability, nearly 75 percent of the aluminum ever made globally is still in use today.

That makes aluminum the most environmentally friendly packaging option available today, said Randy Schumaker, president of Logan Aluminum, which is co-owned by Louisville-based Tri-Arrows Aluminum and Atlanta-based Noveli Inc. and ships can-sheet aluminum to every aluminum can manufacturer in North America. Logan has roughly half of the North American supply market share.

“We start with recycled beverage cans, sidings, lithographic sheet and so on,” said Schumaker. “And we basically reprocess that and make it into the rolled sheet stock.”

As source material, Logan uses ingots produced from recycled materials at the Novelis plant in Berea but also does some direct recycling of its own, he said.

“The most interesting fact is that once our product leaves our plant, it (goes to our customer and) gets made into a can. After it’s used, it gets recycled and it’s back at our door to be processed again in 60 days,” said Schumaker.

Metal production research too

Schumaker is also currently chairman of the board of Secat Inc., an independent, for-profit metallurgical research laboratory at the University of Kentucky that serves the aluminum industry.

Launched in 1999 by a consortium of 16 aluminum companies, Secat conducts research on aluminum product and process technologies for small to mid-sized companies without the resources for in-house research labs of their own, said Todd Boggess, Secat’s general manager.

“The decision to position the facility here came about since Kentucky is such a huge state in terms of aluminum manufacturing and production,” Boggess said. Secat leases space at UK’s Coldstream Research Park and works to optimize aluminum manufacturing and production techniques.

“Metallurgy is not a field with a lot of people; it’s a highly specialized skill set. So here we have 11 people, nine of which are metallurgists, and most of them have a PhD. We recruit really unique individuals, and they are hard to find,” Boggess said. “Whereas most plants 30 years ago might have had 10 or 15 metallurgists in each plant, some plants today have none. So they (our clients) really rely on the work we do here.”

Occasionally, Secat works on publicly funded projects, such as past grants from the Department of Defense and Department of Energy, in which their findings are openly disseminated. More often, though, companies contract with Secat for proprietary projects whose results are confidential.

“Aluminum is a highly competitive industry. So Company A is very strict about us not talking to Company B, and so forth,” Boggess said. “And even though we may be working with competitors, we go to great lengths to make sure that we password-protect everything, and everything is on a need-to-know basis so that there is very little likelihood of any information crossover.”

With the now-booming demand from automotive original equipment manufacturers, Secat has been at work in helping existing aluminum sheet manufacturers anticipate ways they might alter their production process to enter the growing new marketplace – as Logan Aluminum is preparing to do.

“So, maybe you have a company (like Logan) that has produced aluminum-can sheet for years, and all of a sudden they want to expand their product mix to include automotive-sheet alloy,” Boggess said. “There’s a lot of work that goes into converting your operations from being a can-sheet supplier to an automotive-sheet supplier.

“One is, your alloy is different, so you have to introduce new raw materials into your mix. Plus, you have to change your processing parameters. Maybe it takes you longer to produce a finished coil for automotive than it did for can sheet, and so on. These are the kind of factors that go into it.”

Still not enough capacity to meet demand

The advantage of working with Secat, Boggess said, is that manufacturers can perfect their optimization parameters using lab-scale equipment for small-batch test runs rather than experimenting with 30,000-pound coils of aluminum in their own production facilities.

“And on the other side, once they have finished the product, then there’s a process where they have to get their material qualified to be accepted by the OEMs,” Boggess said. “So we help clients do a lot of analytical testing on their material to make sure it meets the specifications that are required by the OEM.”

Boggess anticipates many existing Kentucky aluminum companies may opt to expand to include automotive sheet in their product mix in the coming years to meet the “staggering demand” expected.

“If you just look at what’s been announced by Ford, with the F-150, and other manufacturers, there’s a shortage of capacity. Even with the Aleris expansion in Lewisport and the joint venture in Bowling Green, those plants are still not enough capacity to meet the demand that is projected in 2025,” Boggess said.

As a native Kentuckian himself, Ishmael is pleased to see his home state in a position to reap the benefits of the aluminum boom ahead. “It’s huge for us. For our entire state. Aluminum is key to what we do today and how we’ll grow in the future,” he said. ν

Robin Roenker is a correspondent for The Lane Report. She can be reached at editorial@lanereport.com.

Advanced Manufacturing, Features, features, October 2015, Workforce Development

Three-year Outlook: Record Sales

More than 200 attendees at AutoVision, an inaugural conference by the Kentucky Automotive Industry Association last month focusing on the sector’s future, heard they can keep their feet on the gas pedal.

Automotive journalist Lindsay Chappell, right, conducts an AutoVision conference discussion of “The Next 10 Years in the Auto Industry” with, from left, Yoshimasa Ogino of Akebono Brakes, Chris Nielsen of Toyota, and Tom Kroskey of General Motors.

Automotive journalist Lindsay Chappell, right, conducts an AutoVision conference discussion of “The Next 10 Years in the Auto Industry” with, from left, Yoshimasa Ogino of Akebono Brakes, Chris Nielsen of Toyota, and Tom Kroskey of General Motors.

“Be thankful you are in the United States and in the auto industry,” said Mustafa Mohatarem, chief economist for General Motors.

The U.S. economy, though far from its best self since the Great Recession, is stronger and healthier than any other around the globe, especially any of its chief rivals. And the auto market, Mohatarem said, is about to begin three years that will rewrite sales records.

Probably the chief concern of the auto industry in Kentucky is ensuring that it has an adequate ongoing supply of skilled workers. It is also a primary issue for automakers around the world, AutoVision’s audience heard.

The industry has workforce worries that education systems in Kentucky and elsewhere are not producing enough electrical and computer engineers to create the connected systems that self-driving cars will require if they are to fulfill growing expectations of dramatically lower traffic accident and fatality rates.

In the meantime, Canada and Mexico are producing vehicles at all-time record numbers, the 33-year GM veteran said. And better yet, light-vehicle makers in the United States are about to experience three very fat sales years, in the estimation of GM’s global economic experts.

U.S. sales are nearing the record level achieved 14 years ago, but Mohatarem said those 2001 sales were artificially inflated because the auto industry then was heavily reliant on customer incentives – price cuts or rebates – whose costs also were at all-time high levels.

Mohatarem said GM’s expectation is that vehicle sales in the United States will peak in 2016, setting a new record, then stay at just below that level in 2017 and 2018.

The seasonally adjusted annual sales rate for U.S. vehicles in August, Automotive News reported, equates to 17.8 million vehicles for a year. September sales posted an impressive SAAR of 17.7 million.

On Oct. 1, TrueCar.com raised its 2015 industry sales forecast by 200,000 to 17.4 million, which would top the industry’s all-time high of 17.395 million, set in 2000.

And that is very good news for Kentucky’s auto industry, which includes Toyota’s largest vehicle assembly plant in North America, GM’s expanding Corvette plant in Bowling Green, two Ford assembly plants in Louisville where production and employee numbers are growing, and more than 470 automotive-related supplier operations that support 136,500 jobs in the commonwealth.

“This time it is much better” than in 2001, Mohatarem said, because sales are not reliant on incentives that, while they keep production lines operating, produce artificial demand and little bottom line profit with which to reinvest. Additionally, the economy driving U.S. vehicle sales today is doing so in a manner that the industry is confident is sustainable.

The low, slow growth since the Great Recession – when sales collapsed and U.S. carmakers themselves nearly failed – is built from a reliance on low interest rates by financial and monetary policy makers, Mohatarem said. While it has taken a longer time and created lower GDP growth than everyone would like, that growth is the product of organic marketplace demand.

By contrast, he said, China has had 10 percent annual GDP growth since 2002 and been “the dominant contributor to global growth,” but it did so using artificial financial stimulus. Government spending for massive Chinese infrastructure and housing projects created economic growth and markets for raw materials and consumer products, but it was a “false demand” that built industrial capacity far beyond what its private-sector markets can absorb.

“China has huge excess capacity of steel especially,” Mohatarem said.

Its growth has slowed significantly and is likely about 4 percent, he said, not the 7 percent that China’s government claims officially. The surprise 3 percent Chinese currency devaluation in August that continues to reverberate in stock markets reflects its economic distress. Though it makes China’s products cheaper, and other countries might devalue their currencies also to compete – increased trade friction is likely, Mohatarem said – this and other global financial trends are indications of the strength of the U.S. economy and are working in its favor.

Although many Americans worry the $3.5 trillion in U.S. assets, mostly Treasury bills, that China holds gives it a strong hand, Mohatarem explained that this restricts China’s options to game trade by further devaluing the yuan. The 3 percent devaluation improved the price competitiveness of their exports but cost the Chinese more than $100 billion in value on those U.S. assets.

Another significant world economy and rising U.S. rival, Brazil, has gone into a deep recession, Mohatarem explained, because it had shifted its economic policy focus strongly toward China, whose high GDP growth had made it look like a better market for Brazilian commodities and other products.

The Russian economy is in recession also due to its reliance on high oil prices, which have halved in the past couple of years as a result of hydraulic fracturing technology adding millions of barrels of shale oil production. Most of that comes from the United States, which has become the world’s largest petroleum producer.

“It is a huge revolution,” Mohatarem said, who sees “no path out of recession for Russia.”

In a wide variety of AutoVision presentations on the future of the industry, there was much discussion that self-driving vehicles are only several years rather than decades away. “Adaptive” cruise control technology on some current models makes them nearly driverless. What is lacking, however, are systems that give vehicles digital connectivity to one another and to the roadways.

This is generating anxiety among industry human resources officials and planners about a sufficient number of engineers graduating from colleges in Kentucky and elsewhere to work on creating and enhancing those systems.

The industry is concerned about its access to enough skilled workers, period. A global survey found 50 percent of industry members saying they have serious worries that they will be able to fill their jobs with qualified workers.

The Kentucky Federation of Advanced Manufacturing Education program, developed from a collaboration beginning several years ago between Toyota officials in Georgetown, Ky., and Bluegrass Community Technical College in Lexington, is the premier initiative to build a skilled workforce pipeline.

Kim Menke, manager of community and government relations at Toyota Motor Engineering and Manufacturing North America, is chairman of the KY FAME board. U.S. manufacturing as a whole expects to fill 3.5 million jobs in the next decade, he said.

“We are looking at a 2 million worker deficit,” Menke said.

Advanced Manufacturing, Features, September 2015, Transportation

Toyota is raising the bar for state’s auto sector

Toyota Motor Corp. President Akio Toyoda announces that the Lexus ES 350 sedan will be produced in Georgetown

Toyota Motor Corp. President Akio Toyoda announces that the Lexus ES 350 sedan will be produced in Georgetown

As if Kentucky’s world-renowned automotive industry needed any more notoriety (it didn’t), now the Bluegrass State is about to boast a new popular luxury vehicle that’s homegrown.

“Our team in Georgetown has always been committed to building great cars,” said Rick Hesterberg, external affairs manager at Toyota Motor Manufacturing Kentucky, of the imminent production of the gas-powered Lexus ES 350 sedan, which begins next month at TMMK. “The Camry is a testament to that commitment with 13 years straight as America’s best-selling car. But bringing Lexus to Georgetown raised the bar and has challenged our team to do even better.”

The sixth generation of the Lexus ES 350 was unveiled in April at Auto Shanghai. Since its 1989 introduction, the ES has sold 1.7 million units worldwide. Made until now only in Japan, it goes into production in October at TMMK in Georgetown, which expects to produce 50,000 annually.

The sixth generation of the Lexus ES 350 was unveiled in April at Auto Shanghai. Since its 1989 introduction, the ES has sold 1.7 million units worldwide. Made until now only in Japan, it goes into production in October at TMMK in Georgetown, which expects to produce 50,000 annually.

The sporty luxury sedan’s production in Kentucky marks the first time a Lexus has rolled off a line outside of Japan. TMMK added 750 jobs for ES manufacturing and spent $531 million to grow its plant 307,310 s.f. to accommodate an addition to its already wildly successful family.

“Adding production also attracts more business for our supply base across the commonwealth and adds to the tax revenues for the local economy,” Hesterberg said. “Kentucky is already third in the U.S. in overall vehicle production, and with the addition of Lexus volume should get closer to the No. 2 spot.”

Built on the same platform as the Camry, the ES 350 is a sporty, entry-level luxury vehicle, according to automotive information website Edmunds.com. It offers comfort and lots of optional amenities to go with a V6, 268-hp engine. U.S. sales topped 72,000 in 2013 and 2014 after averaging 51,600 in the 2008-2012 slowdown and post-recession years. The 2016 model will be the sixth generation of ES.

“The ES attracts large numbers of (U.S.) buyers,” according to goodcarbadcar.net, “simply because it’s an ES: refined, quiet, smooth, affordable, sufficiently powerful, in possession of a legendary reputation for reliability, and sold in customer-oriented dealerships.”

Toyota’s announcement a couple of years ago that it would introduce non-Japanese production at TMMK was a “proud moment” accompanied by “much responsibility,” Hesterberg said. Kentuckians are expected to roll 50,000 ES 350s off the line annually.

“From a business standpoint, the decision to build the ES in the U.S. is consistent with our strategy to assemble products in the regions where we sell them,” he said. “The ES was built for this market.”

Kentucky ranks 3rd in U.S. vehicle production

The automotive market for buyers and sellers in Kentucky has a lot going for it. According to the Kentucky Automotive Industry Association, the state is home to more than 460 motor vehicle industry facilities, which include four major auto assembly plants, employing nearly 85,000 people full-time in the state of Kentucky.

In 2014, 1,276,557 vehicles rolled off Kentucky assembly lines, and $5.5 billion in Kentucky-made vehicles and parts were exported. Kentucky ranks third in the United States in light vehicle production – behind Michigan and Ohio – but is first on a per capita basis.

Those are numbers to be reckoned with, and KAIA Executive Director Dave Tatman said the notoriety of adding Lexus to those numbers is significant.

“The prestige of building automobiles in the state of Kentucky was already established by building General Motors’s premiere sports car (the Corvette in Bowling Green), but adding Lexus does give us the full scope of the automotive industry,” he said. “We have covered all the bases, and that’s a really good thing.”

Larry Hayes, secretary for the Kentucky Cabinet for Economic Development, said there is much excitement in the commonwealth about Lexus production and the ripple effects it will have on the state’s economy.

“The real proof of success is when a company that has been in Kentucky (30 years) chooses to expand here,” Hayes said. “Toyota has chosen to expand here time after time. That would not have happened if Toyota were not being successful. That speaks volumes about Kentucky’s economy, its workforce, its economic development programs, its economic environment and a company’s potential for success here. To consider that Toyota would build its top quality model – the Lexus – is the ultimate compliment for what we’ve been trying to accomplish.”

Accompanying the 750 jobs in the Georgetown expansion, he said, are many more jobs outside of TMMK.

“The impact goes way beyond the 750 jobs at the plant, although the direct impact of that is huge,” Hayes said. “There are 750 more families that now have financial stability. Those families now have the resources to buy houses, food, medicines, gas, entertainment, etc., in the communities in which they live.

“Those communities benefit from the extra spending, which, in turn, allows them to hire more people to handle the additional business. The effect grows the economy in other communities. And since Toyota attracts workers from 77 of Kentucky’s 120 counties, the impact throughout Kentucky is huge.”

And, he said, the investment further attracts new businesses to supply the parts the company will need. Toyota already has 100 supplier companies in Kentucky, 15 of which are in Scott County. The numbers of companies should only increase, which grows the Kentucky economy even more.

Tatman said technology advances related to producing new vehicles also are important and will serve Kentucky’s automotive industry well. Kentucky is ahead of the curve, and often setting the bar, for manufacturing technology, which is part of why Lexus came here to begin with.

“Fundamentally, Toyota set the bar in terms of manufacturing processes about 30 to 35 years ago when they started building Toyotas in North America. Everywhere in the commonwealth or the world now is running under ‘lean’ manufacturing principles,” Tatman said. “And as we introduce new models like new Lexus or Corvette, there are variations.”

So not only is there a chance to manufacture and export new luxury vehicles, now the commonwealth can fine-tune its collective manufacturing processes and existing developments even more.

The beauty of adding Lexus to TMMK, he pointed out, is that it’s growing an already successful facility.

“You don’t want to forget your existing businesses,” Tatman said. “I think Kentucky does a terrific job of creating an environment of expansion to our locations. … We constantly work on attracting new business, and we’ve been very successful with that over the past seven or eight years.”

Adding new jobs to existing businesses has an enormous economic impact that will last for years to come.

“With every automotive job that we create in the commonwealth, it creates 3.5 other jobs in other parts of the economy. So it’s a huge economic engine,” Tatman said.

One of every 13 jobs in the state of Kentucky is related to the automotive industry, and the sector has $14.3 economic impact on the state’s GDP.

Additionally, other manufacturing sectors will continue to look to Toyota and the standards it sets. State and local economic development officials hope they will choose to locate their new or expanded facilities here, too.

“Success breeds success,” Hayes said. “When we have companies such as Toyota make such investments in Kentucky over and over, it’s proof we have the environment that businesses look for. We can – and will – recruit new industry and support existing businesses as they expand. Being able to point to Toyota as an example of success is a huge advantage.”

The state continues to partner with Toyota. As well as staying connected with TMMK President Wil James, officials in the Governor’s Office and Cabinet for Economic Development often travel to Japan for face-to-face communication with the company’s leaders.

“The Kentucky Economic Development Authority approved (tax) incentives of $146.5 million for Toyota for both the Lexus investment and an additional $171 million in improvements to the Toyota plant,” Hayes said. “It’s important to note that our incentives are performance based: That means Toyota must make the investment and hire the workers before they can start accessing the incentives.”

Lexus production is about to begin in Georgetown, but there still are improvements that can be made in conjunction with the new high-standard vehicle and in the broader, connected realm of advanced manufacturing growth in the state as a whole. For example, public and private leaders usually say first that the issue of ensuring an ongoing workforce pipeline is real. There is a big need for more workers with the skills to man today’s – and tomorrow’s – increasingly technical production lines.

“Kentucky’s unemployment rate has been below the national average for months,” Hayes said. “That is why we have spent so much time and effort on workforce training. Through the Kentucky Skills Network, and with such programs as KY FAME (Kentucky Federation of Advanced Manufacturing Education), which is an apprentice-type program, we are telling companies, ‘Look, we will work with you to find qualified workers, and we will provide the programs needed to ensure that they are properly trained.’

“Our workforce training programs are attracting national attention for their success, and companies have noticed,” he continued. “Last year alone, we trained 84,000 employees and assisted 4,100 companies.”

Toyota has adopted the Advanced Maintenance Technician training regimen developed at TMMK in conjunction with Bluegrass Community Technical College at all of its North American plants, and the KY FAME model is being used in other auto manufacturing states such as Alabama.

Tatman added that workforce shortages are the single biggest problem faced by the automotive industry in the Kentucky and North America.

“They’re great careers. They’re really not jobs, they’re careers,” he said. “If you choose to get into the automotive industry, you can make a living there for a very long time. Most of our youth and their parents think that manufacturing is dirty, dark and dangerous and it’s not. These are well-lit, well ventilated, ergonomically sensitive jobs with good pay and good benefits.”

He also cited KY FAME and other programs as being “way out in front and doing some things that are really innovative” collaborations between education, innovation and in some cases, government.

Progress is being made in building the workforce pipeline, thanks in large part to what Toyota initiated in partnership with the Kentucky Community and Technical College System. Now the entire manufacturing sector is reaping the benefits, and more jobs are becoming available to more people.

The demand for jobs will no doubt be met by the rising demand for more automotive manufacturing opportunities, like Lexus ES 350.

“All economic forecasts that I’ve been a part of or that I’ve seen would suggest that the North American automotive industry will continue to grow at a slower pace (than in the past few years as it rebounded from the deep sales drop in the 2008-09 recession), but at a pace that maxes out around 18 million vehicles a year, which is way beyond what we were at back in the worst of the recession.”

That growth forecast extends to the global market also, with Kentucky helping supply many of the parts, vehicles and skills for the world’s automotive sector.

Advanced Manufacturing, Features, Features

Stainless Steel’s Kentucky Home

steelTOP

North American Stainless, located along the Ohio River in Carroll County, is the largest stainless steel production facility in North America. A subsidiary of Acerinox of Spain, the company has invested $2.6 billion and has more than 1,400 employees.

Did you know stainless steel production is part of Kentucky’s growing and diverse portfolio of leadership in advanced commercial manufacturing? With little fanfare, the largest stainless steel mill in North America operates on the banks of the Ohio River between Cincinnati and Louisville, where it has access to inexpensive electricity and the U.S. manufacturing heartland.

Its product goes into vehicles, appliances, spacecraft, surgical instruments, plumbing and many architectural uses, including in the new One World Trade Center in New York City.

U.S. 42 between Carrollton and Ghent in the 1980s was largely underdeveloped in the 1980s, former Carroll County Judge Executive Harold “Shorty” Tomlinson remembers. Kentucky Utilities’ Ghent generating station, the electricity provider’s largest coal-fired plant, had opened in 1973 not far from a pair of chemical plants that opened in the 1950s and 1960s. However, many strongly suspected Interstate 71 a few miles east had probably siphoned away the area’s prospects for development, along with most of the Louisville-to-Cincinnati traffic when it opened in the late 1960s.

Things changed in 1990, though.

Acerinox, one of Europe’s leading stainless steel producers, announced plans to expand operations into North America in partnership with U.S.-based Armco Advanced Materials. A new subsidiary, North American Stainless (NAS), would build a production mill near the power plant, with plans to grow in stages.

Widely used and versatile sheet metal coil is one of the North American Stainless’ higher volume products.

Widely used and versatile sheet metal coil is one of the North American Stainless’ higher volume products.

Today, after 25 years and an estimated $2.6 billion investment, NAS is the largest fully integrated stainless steel manufacturing plant in North America, melting 1.2 million tons of product last year. Following plans laid in 1990, NAS built out in seven phases based on the business model Acerinox pioneered at its facility in El Campo de Gibraltar, Spain.

In May, North American Stainless celebrated the 25th anniversary of its Carroll County plant. The Kentucky organization welcomed the leadership of its parent, Acerinox Europa, customers from across the country, commonwealth political and economic leaders, and its entire workforce of 1,400 to 1,500.

They celebrated expectations of a shiny future, too. In January, NAS announced another $150 million expansion.

“Having just celebrated 25 years in the U.S. stainless steel market, North American Stainless continues to be one of Kentucky’s premiere corporate citizens  The sheer size and importance of NAS to their industry illustrates quality, and from Kentucky’s point of view, there is no better company to be carrying our flag around the world,” said Erik Dunnigan, deputy secretary of the Kentucky Cabinet for Economic Development. “Not only have they proven to be invaluable to the manufacturing sector in Kentucky and the many existing Kentucky industries that currently rely on their products, but they also illustrate how Kentucky has truly become one of the leading global players in the world’s economy.

North American Stainless poured some 1.2 million tons of metal in 2014, which represents nearly 3 percent of global stainless steel production last year.

North American Stainless poured some 1.2 million tons of metal in 2014, which represents nearly 3 percent of global stainless steel production last year.

Total global stainless steel production for 2014 was an estimated all-time high of 41 million tons, according to the British steel market monitor MEPS Ltd., besting 2013’s record mark by 7.6 percent. MEPS predicts 2015 world output will increase another 4.9 percent to 43 million tons.

“I was a magistrate in 1989 when I first heard that a stainless steel company was considering Carrollton as a possible location. I kept up with developments when I took over the judge executive’s office in 1990,” Tomlinson said. “The company’s executives told us about how they planned to grow the facility. It seemed a little too good to be true at the time. But over these last two decades or so, NAS has been absolutely true to their word.”

And other companies have followed in their wake, he noted. According to the Kentucky Cabinet for Economic Development, since NAS established operations in Carroll County, four other manufacturers have located in the region.

In the meantime, NAS has demonstrated itself to be an active and community-minded corporate citizen locally and regionally. It helped fund the Kentucky Chamber of Commerce’s $3.2 million Frankfort building renovation in 2010, Tomlinson said, and it was among local industries that contributed to financing Carrollton’s branch of the Jefferson Community and Technical College system.

The impact extends well beyond Carroll County’s borders, said Lisa Cooper, executive director of the Northern Kentucky Area Development District in Florence, because NAS draws its professional workforce from a six- to 10-county area. A lot of the daily commuter traffic heading out of Northern Kentucky, she said, is bound for Carrollton.

“As the largest, fully integrated stainless steel producer in the United States, Northern Kentucky is honored to have North American Stainless. NAS not only contributes to the region and state as a top-quality manufacturer and employer, but it is a great corporate citizen as well,” Cooper said.

“We’ve come a long way from that day in 1993 when we sold our first coil of flat stainless,” said Mary Jean Riley, NAS vice president of finance and administration.

Big plans from the start

Riley came on board the year before and recalls vividly her first organizational meeting. An official from Acerinox had a flip chart outlining every planned phase of facility construction for the next decade with a timetable for achieving full integration of all manufacturing processes, she said.

Selecting Carroll County as its building site achieved phase one.

“There were a number of reasons Acerinox selected Kentucky, and more specifically Carroll County, as a base for its North American operations,” Riley said.

It is strategically located within a day’s delivery time to most of the largest North American markets for stainless steel, she said. Chicago is home to many customers, but it also ships to manufacturing centers in Wisconsin and Michigan as well as all along the East Coast.

The site provides access to the Ohio River, where barge freight delivery cuts the company’s costs for raw materials, Riley said. NAS ships in supplies of nickel and chromium, but she estimates about 80 percent of its finished flat and long products – solid bars, rebar and angled bars – are made from recycled stainless steel scrap.

However, the factor tipping the site-selection scales in Kentucky’s favor likely was the KU plant just a few miles up the road generating plentiful, cheap electricity.

“We knew we were going to be a fully integrated plant. That meant that we would be a hot-mill as well as a cold-mill producer. That kind of an operation would require a lot of electricity,” Riley said. “KU provides electricity at some of the lowest rates in the country, which presented a major costs savings to us.”

NAS started operations, according to its 25-year commemoration recap, with a single cold-rolling stainless production line composed of a Sendzimer mill, two annealing and pickling lines, a grind and polish line, and a slitter.

Two years later, NAS launched phases two and three; it constructed a barge dock facility on the Ohio River, and it doubled its manufactured production output with the addition of a second cold-rolling mill.

Between 1996 and 2001, NAS executed its most ambitious run of building phases. It invested approximately $264 million into construction of a hot-rolling mill, including a reheat furnace that drives stainless steel slabs to temperatures of over 2,370 degrees Fahrenheit, according to the company’s Flat Product catalog.

Addition of a plate shop in 2001 enabled NAS to produce stainless steel plate annealed in a furnace at 2,000 degrees and cut to lengths and thicknesses within the specific tolerances their customers require. For slabs exceeding one-inch gauge, specialized workers operate a 600-amp plasma cutter to cut widths and lengths to exacting order.

Its first melt shop was completed in 2002, concluding the company’s journey to full integration in the manufacture of stainless steel. That addition paved the way for NAS to begin producing “long product” – a whole range of solid stainless steel bars including cold drawn bar, peeled bar, wire coils and angled products.

First North America, then the hemisphere

In less than a decade, NAS achieved its initial goal. It became the largest, fully integrated stainless steel plant in North America. The company is still in the process of executing its business plan to become the leading supplier of stainless steel in the Western Hemisphere, Riley said.

It was the only plant of its kind in the United States until recently, she said. A competitor in Alabama, formerly known as Thyssenkrupp USA, also became a fully integrated facility in the last few years, but it is still going through growth processes that NAS has completed.

Although it reached its primary business goal over a decade ago, NAS has remained ambitious and not settled into routine, satisfied operations. The company keeps investing and expanding operations as new markets open up Riley said. Keeping up with the times and remaining a state-of-the-art facility is extremely important in any industry, but especially in the world of stainless steel, Riley commented.

In its second decade of operation, NAS added a second hot-rolling mill line, including a second electric arc furnace and a metallurgy furnace, as well as an expansion of its laboratory facilities that oversee the quality and integrity of NAS’ output.

Earlier this year, NAS announced it would invest another $150 million to install a bright annealing line that can add a mirror-like finish to its stainless steel. Many appliance companies fabricate with BA stainless for the inside drums of high-end clothes dryers and dishwashing machines, Riley said. There also are applications for BA by auto manufacturers for the cosmetic enhancement of a new car’s trim.

“Though there are more similarities than differences between the (Acerinox Europa) plant in Spain and NAS in Kentucky,” Riley said, “the key differences are that the Spain plant has two BA lines. However, they don’t manufacture long product on site. Another Acerinox plant produces the long product in Europe.”

The BA line announced in January is expected to be completed in 2017.

Specialty product, specialty uses

NAS is a one-stop shop for its customers with the capacity to produce every grade of stainless steel: ferritic, austenitic, martensitic, precipitation hardening grades as well as the long product, Riley said.

It is sometimes difficult to separate the stainless steel manufacturer from the products that its customers use the steel to fabricate. Some of the more high-profile uses of stainless steel are in modern architecture. There is NAS-produced stainless steel in the One World Trade Center in New York City, Riley said. Customers with ties to the federal government have ordered NAS’ Precipitation Hardening Grades to be used for instruments and panels in airplanes and even in space travel.

But these high-profile applications are not the company’s bread and butter, she continued. The automotive industry is among its largest customers, along with appliance manufacturers and producers of commercial restaurant equipment. Surgical instruments, industrial grade fasteners, plumbing and specialized pipe fittings are manufactured from long-product stainless steel because of its relatively higher level of resistance to corrosion.

NAS sells some 70 percent of its production via distributors rather than directly to end users.

“The highest demand is for our ferritic and austenitic grades of stainless,” Riley said. “Martensitic grades of stainless steel are mostly used in our long product.”

NAS aims to maintain the most up-to-date and environmentally forward manufacturing standards, Riley said, and became one of the inaugural members of the state Department of Environmental Protection’s Kentucky EXCEL environmental leadership program. It upgraded to master-level membership in 2013, she said, both to demonstrate its commitment to environmental manufacturing and to enable it to sponsor educational programs.

The Carroll County site has grown from 161 employees when it began operations in 1992 to 1,382 in 2014, according to Acerinox’s annual report. That number is now more than 1,400, and the company is increasingly interested in Kentucky workforce development.

In education, NAS partnered with JCTCS several years ago to introduce an electrical technology associates degree program that is patterned on the Kentucky Federation for Advanced Manufacturing Education model (an article in June’s edition of The Lane Report detailed KY FAME) under which students divide their time between classroom work and working full time at NAS.

“With KU, Dow Corning, NAS and the other industries in Carroll County, skilled electrical technicians are in high demand for this area,” Riley said.

Its employees have been and will continue to be a vital component of the operational growth NAS has enjoyed in the past 25 years.

“People in this region have a great work ethic and they enjoy working here. When they come, the majority tend to stay,” Riley said. “That experience translates into a very knowledgeable workforce, from the people in the production end to the sales force around the country.”

Advanced new production equipment looks impressive, Riley said, but it will be the employees that enable NAS to celebrate its 50th anniversary and the century marks in Kentucky.

“Stainless steel is an extraordinary material that is still in its growing phase,” Acerinox CEO Bernardo Velázquez said in his 2014 annual report letter. “More and more applications can be found in our daily lives. Few materials can boast of a growth rate by 6 percent in the last 65 years.”

Josh Shepherd is a correspondent for The Lane ReportHe can be reached at editorial@lanereport.com.

Advanced Manufacturing, Education, Features, Technology, Workforce Development

Manufacturers Help Colleges Improve Tech Training Curriculum with KY FAME

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The Kentucky Federation for Advanced Manufacturing Education program, which now has five active chapters around the state and others in development, arose from a collaboration initiated in 2009 by Toyota Motor Manufacturing Kentucky in Georgetown with Bluegrass Community Technical College in Lexington. Students are shown learning advanced technical skills in a classroom Toyota built at its TMMK campus.

Pioneered six years ago, a quickly expanding system of Kentucky employer-educator partnerships is paying student workers to learn advanced manufacturing skills that can maintain growth in the state’s increasingly significant industrial sector.

It’s an Americanized update of the apprenticeship approach to workforce development that German and Japanese industries have relied on successfully for generations – and it was created in central Kentucky.

Manufacturing is one of the fastest growing sectors in Kentucky’s recovering economy, said Josh Benton, executive director of workforce development in the Kentucky Cabinet for Economic Development. And the growth of career opportunities among Kentucky’s leading manufacturers is developing well ahead of the recovery of other industries, Benton said.

National studies chart a constant and steady rise in career opportunities in every state, according to Greg Higdon, president and CEO of the Kentucky Association of Manufacturers.

The commonwealth’s manufacturing gross revenues are up over 12 percent since 2009 with global exports fueling a large portion of the sector’s renaissance, Higdon said. Data show some U.S. manufacturing career growth is due to many companies bringing production operations back to North America, he said, but a more significant reason is that skilled workers from the baby boom generation are reaching retirement age.

However, human resource departments at company after company are finding it difficult to locate qualified job candidates in their locations to fill these well-paying open positions, Benton said. It’s a common concern among KAM and cabinet leaders that there are few applicants with the skill sets to perform today’s highly specialized tasks.

“Employers realized that we have fallen behind from the days when a company posts a job opening and is overwhelmed by qualified applicants,” Benton said.

The good news is that Kentucky’s private-sector manufacturers have taken a leadership role in addressing this issue, said Kim Menke, external and government affairs
manager for Toyota Motor Engineering and Manufacturing of North America. Menke is a lead spokesperson for a unique partnership between manufacturing firms and the Kentucky Community and Technical College System that has captured the attention of neighboring states and the U.S. Department of Labor.

This collaborative is the result of an employer-educator partnership (EEP) program pioneered in central Kentucky six years ago. The concept has been met with such enthusiasm in the private
sector and at the state government level that the Kentucky Federation for Advanced Manufacturing Education (KY FAME) is expanding throughout the commonwealth.

Kentucky’s solution to a national problem

Student workers in the KY FAME program spend two days a week in the classroom and three days a week at paid jobs with participating manufacturer partners, who help develop 18-month curriculums that lead to an associate’s degree and a full-time job.

Student workers in the KY FAME program spend two days a week in the classroom and three days a week at paid jobs with participating manufacturer partners, who help develop 18-month curriculums that lead to an associate’s degree and a full-time job.

With reported U.S. manufacturing job openings topping 1.5 million, the model is spreading beyond state borders, too. Toyota has applied it to its other manufacturing sites in North America, Menke said, adding, “We are changing the paradigm of how we use education to meet the current and future needs of manufacturing.”

The experiment that eventually grew into KY FAME started at Toyota’s Georgetown plant with the participation of Bluegrass Community and Technical College.

Benton labels KY FAME the “next generation in technical training” for achieving a career track in advanced manufacturing. Dianne Leveridge, Ph.D., director of technical programs for the Kentucky Community and Technical College System, agrees.

Today, KY FAME is a partnership of regional manufacturers and college educators developing degree programs that constitute a pipeline of qualified candidates for high-technology careers in manufacturing, Leveridge said. Students accepted into a KY FAME-based degree program will be employed by a company while attending college classes.

A key feature of this partnership is that it’s employer-led, she said. Companies identify to KCTCS professors their general needs for skilled specialists and, together, they craft an academic program that combines educating students on core concepts of manufacturing and professional behaviors with on-the-job experience and training. The usual weekly schedule has student-employees putting in three full work days at their sponsor firm and two full days in specialized KCTCS classrooms.

“Manufacturers will tell you that they were accustomed to luring talent away from each other,” Leveridge said. “KY FAME offers a better approach. The partner firms in a KY FAME chapter agree to participate in the education and preparation of students and create the pipeline of skilled professionals from college to their ranks.”

Gov. Steve Beshear formally adopted the pioneering program as a statewide initiative after being urged by Toyota Motor Manufacturing, 3M, Link-Belt and other leading manufacturers in the region. KAM and the Cabinet for Economic Development gladly added their support, said Higdon.

“The efforts of industry leaders and educators to craft this initiative is a critical component to developing a work-ready constituency coming out of our secondary and postsecondary education system. Soon Kentucky will have graduates ready to go to work in the modern manufacturing sector,” Higdon said.

By fall 2015, Leveridge said, the new KY FAME chapters will begin their apprenticeship-type operations in Louisville, Northern Kentucky, Greater Owensboro and the Lincoln Trail area of Elizabethtown and Bardstown.

KY FAME became a freestanding entity in January. Gov. Beshear appointed a state board and announced three new chapters had formed; the fifth came in May. Planned next steps are to establish KY FAME chapters in Paducah and Murray in the west, Bowling Green in the south and Maysville, Pikeville and Somerset in the east.

Concepts come from Toyota and Germany

The basic program concept itself is not new, Leveridge said. The EEP partnership that grew into the Bluegrass Chapter of KY FAME has been an evolving experiment in central Kentucky since 2009. KY FAME’s genesis arose from two particular threads, she said.

The first, and arguably most significant, occurred about six years ago.

Menke, who was in on the development, said Toyota recognized early on a need for a new approach to employee training. Typical of the company’s organized and efficient management style, he said, the company established measurement benchmarks and approached potential partners about creating a solution. In this case, the need was to develop the best program to produce globally competitive advanced manufacturing technicians in their area.

Toyota, along with other central Kentucky manufacturing industry partners such as 3M and Link-Belt, approached educators at Bluegrass Community Technical College in Lexington to establish the Bluegrass Manufacturing Collaborative in 2009.

Leveridge became involved through her role then with the University of Kentucky’s College of Engineering as director of Project Lead the Way – an effort to encourage secondary school students to become interested in science, technology, engineering and math studies (STEM).

“We knew at the time that (Kentucky private sector) manufacturing and technology interests needed to extend a hand into secondary and higher education, but we were still unsure about what that approach would look like,” she said.

In the first two years, a cohort of students began enrolling into initial Bluegrass Manufacturing Collaborative education-training classes sponsored by Toyota. As that training cohort evolved into an organized program, other manufacturers committed to sponsor students as well.

The foundation of the degree program is based on the Toyota Way and its 11 fundamental elements: five core manufacturing exercises and six personal behaviors. Core manufacturing concepts include a safety culture, the “5-S” system of efficient workplace organization, “lean” system thinking and problem-solving skills, Leveridge said, emphasizing that any general list is an extreme oversimplification of the educational curriculum KY FAME presents.

For example, safety culture involves much more than obeying workplace safety rules; students learn to think critically about their work environment and identify risks, she said. And the “5-S” efficiency system originates from a Japanese philosophy on organizing and sustaining a productive work environment.

Professional behaviors taught focus on basic workplace skills such as effective team work, communications, taking initiative, developing productive workplace relationships across departments and other dynamic workplace practices, Higdon said.

“I don’t think we can emphasize enough the importance of developing professional skills. The old days of walking in, punching a time clock and standing at one machine are over in the manufacturing sector,” he said.

“There is a perception that workers in manufacturing don’t need skills because the machinery does all the work, but nothing could be further from the truth. It is critical for workers to bring critical thinking and teamwork to the table to ensure that the machinery continues to produce high-quality products in the most cost-efficient manner possible.”

Students in the first cohort who completed the program earned associate degrees in applied science in industrial technology.

The point is to develop employees who actively engage themselves in the progress of their company, Leveridge said. Firms want employees who contribute; they don’t want automatons who only want to perform tasks day-after-day and return home.

The initial program that developed, she said, was delivered, taught and implemented by Toyota within a “college classroom environment,” but with an approach different from the traditional classroom.

Menke described the classroom as a simulated high technology manufacturing environment where core concepts are taught by demonstration and presented with a practical application so that they are a skill set.

This employer-educator partnership evolved in five years into the KY FAME program.

Toyota’s model has been the most influential aspect of the KY FAME partnership, Benton said, but Kentucky has learned a great deal also from its developing relationship with the German Chamber of Commerce.

Germany’s dual system of education and hands-on experience “mirrors the KY FAME model very closely,” he said.

Employer-led academic degrees

Benton and Leveridge both stress that the degree programs developed through the EEP partnership aim to not limit the ambitions of students. The concepts taught “can be a leaping off point for students to transfer into bachelors and masters programs in engineering and business,” said Leveridge.

Most of Kentucky’s state universities are on board with KY FAME’s goals.

“It’s a unique program and a definite change over the way that education is delivered, since it caters directly to the needs of the workplace professional,” Benton said.

Because employers lead the program, educators and real-world managers are collaborating in a more deeply integrated way than ever, Leveridge said, including the monitoring of specific students’ progress.

“If a student can’t report to work for whatever reason, that information is shared with the school,” she said. “Conversely, if a student is having difficulty grasping an academic concept in class, the educator informs the employer.”

The real-world application employers provide for skills being taught in class helps faculty as well as students make the connection between concepts presented in school and what is done in the workplace.

“Education and employer are both invested in the success of the employee-student,” she said.

Meanwhile, participation in KY FAME requires that employers reimburse their student-workers with a fair wage, which they can apply toward their education costs for the program. This reduces participants’ student debt, Benton said. Some finish their degree with no student loan debt.

AMT program arose similarly

Another main element of the KY FAME template was incorporated last December, Leveridge said, when the KCTCS Board of Trustees adopted the Advanced Manufacturing Technician track within the system’s industrial maintenance technology program.

Also developed as a partnership between Toyota and BCTC, the AMT program grew out of a common need among manufacturing firms for employees with the skills to operate, program and maintain the new generation of digital automation technology. AMT student instruction, such as how to program an assembly line robot, takes place uniquely at TMMK’s sprawling Georgetown site where Toyota built a 12,000-s.f. classroom to simulate a modern manufacturing floor.

The 23 firms that participate in what is now the Bluegrass Chapter of KY FAME all have ongoing needs for specialists skilled equally in mechanics and in manipulating computer programming processes.

Terry McMichael, maintenance focus team advisor at 3M Manufacturing in Cynthiana and Bluegrass chapter president of KY FAME, has been involved in the AMT degree program from the beginning. He hired the first sponsored student to complete the five-semester program. Two more 3M-sponsored students are now working toward AMT degrees.

“We have been following the progress our students as they moved through the program, and they are each developing a firm grasp of the skills we need from them,” McMichael said. “We recruited them directly from the high schools in our local community, and I’ve been very pleased with their performance.”

Menke said this program began with training students in industrial maintenance because the skills were an immediate need the partner firms shared.

“The requirements for a multiskilled maintenance professional are fairly uniform across the board,” he said. “But when you look at other firms specializing in tool and die production, that requires a whole new level of skill sets.”

Keeping complex and expensive production machines operational, trouble-shooting breakdowns and repairing them can no longer be accomplished by ordinary mechanics, Leveridge said. Socket wrenches and screwdrivers are still used, but perhaps more important is an understanding of programming processes and problem-solving skills.

The AMT degree program aims to create a pipeline of Kentucky professionals with this specific skill set plus an ability to innovate, especially in identifying and implementing cost-cutting improvements. These kinds of professionals are in high demand, Leveridge said.

It has been exciting to see manufacturers embrace the idea with such enthusiasm, said McMichael. All of the active KY FAME chapters will have AMT degree programs beginning in the fall.

McMichael views the willingness of all these manufacturers to work together as another critical benefit of the KY FAME partnership. The Northern Kentucky chapter could soon have about 75 companies committed to participate.

“All that experience, all that involvement in one place,” Menke said. “Everybody brings something important to the table. Think about what that means to Kentucky’s reputation as a global manufacturing leader. Implementing these shared ideas raises the standard of manufacturing quality in Kentucky and produces a population of professionals other companies want to hire.”

When the Northern Kentucky chapter hosted a KY FAME open house to recruit qualified high school students, firms such as Hahn Automation, L’Oreal, Wagstaff and others set up demonstrations. The technology on display clearly had an impact.

“Parents called in after that asking how they can get their kid into the program,” Leveridge said.

This consequence will be a long-term boon to the retention and growth of existing companies in the commonwealth and to attracting new firms to establish here, Menke said.

Advanced Manufacturing, Current Issue, Economic Commentary, Economic Development, Education, Fast Lane, Faster Lane, Features, Features, March 2015, One-On-One, One-on-One, Technology, Workforce Development

One-on-One: Kentucky auto manufacturing finds its voice

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Dave Tatman was recently named as the inaugural executive director of the Kentucky Automotive Industry Association. He also serves at Western Kentucky University as associate vice president for advanced manufacturing. Tatman retired after a 34-year career at General Motors, where he most recently served as plant manager for the Corvette Assembly Facility in Bowling Green. During his time at the Bowling Green plant, Tatman led five consecutive model-year launches and oversaw a $131 million investment to upgrade the plant and equipment, adding 350 new jobs, to produce the all-new 2014 Corvette Stingray, which was named as the NA Car of the Year in January 2014. Tatman, who holds a bachelor’s degree in science, industrial and systems engineering from Ohio State University and a master of business administration, corporate policy from Michigan State University, recently co-authored a book on leadership entitled “Building Cathedrals – The Power of Purpose.”

Ed Lane: In April 2014, Gov. Steve Beshear announced the formation of a new entity, the Kentucky Automotive Industry Association (KAIA). The association has a 12-person board of directors and is chaired by Larry Hayes, secretary of the Cabinet for Economic Development. Secretary Hayes in July announced your selection as the executive director. You have been in your new position about eight months. What are your specific duties as executive director of the KAIA?
Dave Tatman: Let’s step back to March 2014, when I retired from Corvette (as manager of GM’s Bowling Green Assembly Plant). I decided to retire because my family and I wanted to stay in Kentucky. I had a terrific 34-year career at General Motors; I loved every minute of it. There are some challenging times, as you well know, but the Corvette plant had been my 13th GM location, and I didn’t want to have a 14th. My wife and daughter and I had fallen in love with Kentucky. I chose to leave General Motors, without a real clear plan for my next career steps. But I had this notion that I wanted to work on a little larger scale. I had enjoyed tremendous success with General Motors, capped off by the incredible launch and success of the new Corvette Stingray.
I was starting to explore some options when I got a phone call from Secretary Hayes. He congratulated me on my GM retirement and then asked what my next steps would be, and I said I wasn’t sure. He said he had an idea. And so that began our conversations, even before the announcement had been made about the (formation of) KAIA. On the first of July, I started full-time as executive director with the association. It was very important to the governor and the KAIA board of directors that the organization be seen and perceived as industry-driven. The KAIA fit perfectly into what I wanted: to work on a larger scale. My charge, at the direction of our board of directors, is to build the KAIA into a common voice for the auto industry in Kentucky. The industry is vital to the economy of the commonwealth, but prior to last summer Kentucky really didn’t have an organization that represented the state’s auto industry.

EL: What are the primary missions of the KAIA?
DT: The KAIA has established four objectives. The first is branding. The auto industry doesn’t have a brand in Kentucky. When the governor goes to speak to the conferences in Germany, they’ll often scratch their heads and say, “Kentucky?” When I talk to groups around the state and the country about Kentucky being the third-largest state in terms of automotive production, they’re like, “Really?” So we need to brand the industry and demonstrate that Kentucky is a great place to operate an automotive business.
The KAIA’s second objective is advocacy – to be a voice for the auto industry. This is actually a very comfortable position for me because I understand the life of my colleagues in the industry throughout Kentucky. The fact is, the pace of the automotive business is such that managers rarely have time to look beyond today or tomorrow. And the issues that we face as an industry in terms of our opportunities for growth and overcoming obstacles to expansion are issues a plant manager doesn’t address because he doesn’t have time. You worry about it, but it never gets to the top of your to-do list. I spent 34 years running operations.
I know how to run a factory. I know I ignored important objectives during that time because they were outside the four walls of my plant. I didn’t have to worry about “that” issue; I was hoping somebody else was doing that. Well, I’m doing that now for the automotive industry. That’s the advocacy piece.
toyotas-crew Our third objective is leadership. Because auto manufacturing lacked a common voice as a Kentucky industry, it never really stood up as an industry and said, here’s our perspective. (It didn’t answer questions about) what does the automotive industry think about this?
The fourth and final objective, and really probably the one I spend the most of my time on, is workforce development. The biggest challenge we face in the automotive industry is having talented workers ready to take the jobs that are becoming available. And so that’s how I spend a lot of my time. I’m in middle and high schools; I’m at colleges and universities; I’m in the community and technical schools, working to ensure that exceptional occupational opportunities of our industry are known.

EL: How big is Kentucky’s automotive industry?
DT: The automotive industry in the state of Kentucky is comprised of about 460 different manufacturing plants, employing almost 90,000 employees. It’s a huge impact. It exports over $5.5 billion worth of automobiles and automotive products every year. In 2014, the state of Kentucky built over 1.2 million light vehicles and passenger cars. When you think about that in the context of things, that puts Kentucky third, behind only Michigan and Ohio. The epicenter of the automotive business is moving south, and Kentucky is right in the heart of that growth area and has the ability to take advantage of its central U.S. location.

EL: Is the KAIA underwriting a state auto industry economic impact study?
DT: The KAIA has partnered with UofL’s Urban Studies Institute to do an economic impact study for the automotive industry in Kentucky. It’s very similar to the study UofL did for the distilling industry – primarily the bourbon industry – that they released last fall. We want to fully understand that (dollar and job) multiplier effect of the auto industry. Is it four, is it nine, is it 12? There are a lot of jobs created for every job created in an auto manufacturing plant. We want to understand the metrics of economic development growth as it compares to neighboring states and to our competition. So we’re going to use that study to conduct nine regional workshops throughout the state in the spring and summer. Eighty of Kentucky’s 120 counties have some form of automotive business in them.

EL: Is the move to the South partly because of right-to-work?
DT: That’s a great question. I expected to talk about right-to-work today. I tend to agree with Gov. Beshear’s position. Right-to-work is very much a sensitive political issue today. We’re seeing the debate going on. About 25 of the 50 states now have some right-to-work legislation. We’re seeing the debate in Wisconsin right now. Michigan and Indiana both chose to go right-to-work recently. It is a tool for economic development. I think it was a very attractive issue for a lot of the European and Asian automakers who have located in the South. But in our state, we find both union and nonunion firms working very effectively.
I’ve got members on both sides of the equation, so I don’t take a firm stance on right-to-work. I say, let’s leave it to the legislature; see what the government decides to do about it. There are potentially companies who won’t consider Kentucky because it is not a right-to-work state, and I suppose – but I don’t know for a fact – the reverse could be true as well, that there are companies who located here because Kentucky does welcome unions. The evidence suggests that Kentucky’s done a tremendous job of attracting businesses in spite of a lack of right-to-work legislation.

Tatman-Vette-textEL: How was your working relationship with unions when you worked for GM?
DT: I worked 34 years in a union environment, and I never found a union official that I couldn’t work with. At the end of the day, we’re just a couple of people trying to make a living for our families. You approach it that way and you don’t say, “You’re wrong and I’m right.” Collaboration is the name of the game, so I’m not overly pro-union or right-to-work. I think both concepts can peacefully coexist, as they have in Kentucky for a long time.

EL: Does the free-market system equalize prices and wages in the auto industry? If you are a manufacturer and nonunion, you have to pay competitive wages to attract quality employees.
DT: Yes, especially in this environment of scarce labor. You know, we’re seeing that happen all the time. Walmart, for heaven’s sake, raised its minimum wage. All the guys at McDonald’s and Burger King are starting to scurry, and we just heard yesterday that Target is raising its wages. It is so interesting that states are having a debate on (raising their) minimum wage. Meanwhile, free market forces have taken over, and employers are starting to respond.

EL: Even though Ford had been manufacturing cars and trucks in Kentucky since 1913, do you think Toyota locating in Kentucky 30 years ago was especially important because it was a catalyst to expand the state’s automotive industry? At the time, the state’s economy was weak and population growth was static because not that many people were inmigrating to Kentucky, and some were outmigrating because they didn’t have jobs.
DT: Certainly Toyota deciding to build its operations in Georgetown was a huge benefit for the state of Kentucky. I congratulate all the leaders who recruited Toyota. Georgetown is now one of Toyota’s largest manufacturing facilities in the world and, of course, Toyota is going to launch the new Lexus there. But moreover, Toyota has exercised terrific corporate citizenry in the time they’ve been here in Kentucky. As Toyota worked to develop infrastructure, it also worked to develop relationships with government and jurisdictional entities, and Toyota has brought other businesses with them.
crossoverThere’s a huge incentive and impetus in the automotive industry to locate supplier plants in proximity to assembly plants. And as we move further in the technology of vehicle assembly, the original equipment manufacturers, or OEMs, do less and less in their plants utilizing their employees and rely more and more on service providers. So that industry is growing as well. Toyota has been here about 30 years; GM has been in Bowling Green about 30 years; Ford has been in Louisville over 100 years. Those OEMs are the foundations upon which Kentucky has built a terrific base of automotive business.

EL: How will the KAIA be funded?
DT: Upon founding the KAIA, each board member was regarded as a founding member. Our board is comprised of the three OEM members, a member from the Kentucky Economic Development Cabinet (Hayes as chairman) and eight other significant suppliers. And each of these firms primed the pump for the KAIA with a founder’s fee. And every member pays annual dues, so as the KAIA grows, dues revenue grows. And we’ll continue to see additional funding from special events and sponsorships to auto-related events that will continue to propagate the organization.

EL: What is your relationship with Western Kentucky University?
DT: At the same time that I was having conversations with the state and the KAIA, I was approached by WKU to talk about how the university could leverage my background, skills and experience to further auto industry relationships with the university. And so I work on a very limited part-time basis for WKU, connecting the dots in the south-central Kentucky region, in WKU’s region of influence, to try and ensure that when industries seek university assistance or partnerships, I can help facilitate that.

EL: Would WKU provide specialized training for people in the automotive industry, or would that be specifically through the Kentucky Community and Technical College System, which created the successful Advanced Manufacturing Technician program?
DT: It could be all of the above. One of the things we’re having a lot of discussion about is that there’s this very significant aluminum business development in south-central Kentucky and up along the Owensboro corridor, and the industry needs materials science and metallurgical engineering. The University of Kentucky is now setting up a terrific program in those areas, but short-term certification training is also needed, so WKU is focusing on that. The relationships that are most leverageable for an educational institution like WKU or UK or the University of Louisville are those collaboratively working with the auto industry on applied research. The auto industry doesn’t have the time, resources or desire to do a lot of research for research’s sake, but universities do, and they’ve got terrifically talented great young minds available. Those kinds of partnerships and industrial relationships have been developing for a long time and continue to develop in a significant way.

F-150EL: One of the highest priority issues for the auto industry is workforce development. What are some of the training programs available for persons who are interested in an auto manufacturing career?
DT: You’ve hit on a really critical issue here in Kentucky. Our situation, in terms of workforce readiness, is quite frankly no different than we see in other auto manufacturing centers around America. I heard all about it in South Carolina (in late February). Toyota and GM have been here about 30 years, which is the duration of a normal automotive career path – 30 or 35 years. Employees are now starting to retire. Job openings are also occurring because the auto business is globally expanding – the North American market is continuing to expand unbelievably – it hasn’t been that long ago 9 million cars a year were built in North America; now the industry is looking at building 18 million cars this year.
So not only is there increased auto sales, but we have a huge attrition of (retiring) employees also going on. The auto industry has a significant crisis on its hands with having people ready for these jobs. So I applaud the efforts of the Kentucky Federation of Advanced Manufacturing Education (KY FAME). KY FAME is spreading statewide out of a program that was started in Georgetown by Toyota and the Bluegrass Community and Technical College. It’s a five-semester cooperative internship educational experience where the student goes to school two days a week full-time – and this is not two or three classes; they go from 8 a.m. to 5 p.m., a full work day – and they work three days a week. And after five semesters, students graduate with a dual-tracked apprenticeship now that allows them to become skilled maintenance technicians.
The skill sets that Kentucky FAME also teaches include problem solving, teamwork, and many other so-called softer side skills. Those are very important in the world that we work in today. I would venture to guess there are very few automotive employees in the state of Kentucky who don’t work in small groups, working on problems that their group faces. So all of those dynamics are in play as well.
There are a number of companies involved in FAME; it’s been around for about 13 years. In a conversation at a KAIA event in October 2014, I was talking with some of our members up in Northern Kentucky, which is a hotbed for some German auto (parts) manufacturers. At this event, we discussed what’s going on in Georgetown at the KCTCS school there, and the idea to start copying and pasting that training program around the state. So now we’ve got this terrific initiative going on with Kentucky FAME: A chapter is now operating in Northern Kentucky at Gateway Community College; in Louisville, Ford has a program at Jefferson Community College; a chapter is planned in Elizabethtown.
Much like Toyota, Ford had been working on this effort for a while, and the domestic big three have had a long history of apprenticeship programs. General Motors had stepped away from them for a long period of time because its auto production was shrinking; GM still had all these employees, so it didn’t have any need to train new employees. Well, now all of a sudden GM is saying, oh my gosh, we need qualified employees. If Ford were to graduate apprenticeships into regular skilled trades type of work, those employees could transfer under the provisions of the Ford UAW international agreement to other Ford plants around the country.

KFAM-EdBdEL: You started your career at GM as a college intern and retired from the company in 2014 as the plant manager of GM’s Corvette plant in Bowling Green. Are you a “poster boy” for a career in advanced manufacturing?
DT: I certainly was blessed with a terrific 34-year career at GM. I actually was selected in my sophomore year of college, in a competitive interview process, to be what was then called a “GM scholar,” where GM paid for my tuition and books and gave me a summer internship my last two years of school. So that set me on the path that said maybe this was a potential career. There was no obligation to go to work for GM when I graduated. I interviewed – it was a very good time to graduate; I had a number of offers – but I found myself comparing the other offers to the job I was going to do at GM. In some respects my career path at GM could be considered a case study. I got my master’s degree at night; I worked all day and went to the University of Michigan at night, and GM paid all my tuition and books for that degree.
That certainly facilitated my learning and knowledge of business systems. And things progressed from there. If one chooses that kind of career today, that’s certainly a typical or potential career path that may require sacrifices. You’d better be prepared for moving your family, working in a number of different locations, and that would usually include some international locations. I worked in three different countries: Canada, the U.S. and Brazil. And I moved my family five times. The four-year degree, starting with a business or engineering degree, and then working your way up, is absolutely a clear career path. But as I said, not everybody is motivated that way. When you look at a trillion-dollar student debt problem in this country, maybe college isn’t the right answer for everybody. Successful is a relative definition. Success could be having a satisfying career in advanced manufacturing that allows you to provide a quality lifestyle for your family.

EL: Since a limited number of the general public has actually been inside an “advanced manufacturing auto plant,” is there a perception about working in an auto plant that does not reflect reality?
DT: Absolutely! That’s a big problem. Not only do auto employers need to convince elementary, middle and high school students of the attractiveness of auto manufacturing jobs, but they’ve got to convince their parents of that as well. The Corvette plant is open to the public for tours every day that it runs cars. There are four public tours a day. In many ways, that was the only impression of GM and of automotive manufacturing that many people would ever get. Now Toyota does tours, and Ford does some limited tours, so there are those opportunities, but it was very important to me that whoever came in the door to see our plant walked away saying that it was a clean plant, well-lit, with workers fairly tasked with the jobs they have to do, that they’re ergonomically sensitive, that all those kinds of things were true.
That’s the manufacturing world we work in today. Now there are some tough jobs in manufacturing; don’t get me wrong. But by and large, the auto industry has elevated the whole scheme of things in manufacturing to where the jobs are good jobs. It will probably take another generation of workers until the perception that manufacturing is ‘dark, dirty and dangerous’ is completely eliminated. Employers expect you to come to work every day, to stay drug-free, to be at work on time, and to work until the end of the shift. But what’s wrong with that? That’s just a good work ethic.

EL: What are the pay ranges (for new trainees to highly experienced workers) in auto manufacturing jobs?
DT: It varies a lot from company to company. Probably the bottom end is around $15 an hour, and the top end can be north of $30, plus overtime. Plus Ford and GM both have, as part of their national agreements with the UAW, a profit-sharing plan that kicks in extra money. It’s a pretty good compensation package with benefits.

EL: Do you have a closing comment?
DT: As I said, I woke up every day and was excited to go to work at GM. I am so blessed to have a second career chapter that is equally exciting and fun for me. For 34 years I was confined to the four walls of a factory; I could hardly leave for lunch, and my life went in 6-second increments. So I’m enjoying very much the opportunity to travel the state, to get into different suppliers and automotive companies, to talk and to learn what really is on people’s minds. A huge amount of the automotive supplier business is done by very small firms. There are also some megaplayers in the supply business, as big as the OEMs, but the reality is that there are a lot of small shops around the state that, prior to the KAIA’s formation, never knew how they could get their voices heard. Well, there’s a way now, and I love being the person to talk to about Kentucky’s auto industry. ■

Advanced Manufacturing, Economic Development, Faster Lane, Photos, Workforce Development

Soft drink bottler invests $12 million in Louisville facility

cc consolidateThe nation’s largest independent Coca-Cola bottler, Coca-Cola Consolidated, celebrated the grand opening of a new, 25-acre site in Southwest Louisville. The Charlotte, NC-based company invested more than $12 million to renovate a vacant warehouse, fit-up office space, add 100,000 s.f. of new construction to create a state-of-the art, 305,00 s.f. facility.

Speaking at a ribbon cutting ceremony on March 26, Louisville mayor Greg Fischer said “This major investment in their new facility is a positive statement about the company’s commitment to Louisville … .” The bottler’s Chairman and CEO, Frank Harrison, said, “(Louisville) is a great, vibrant city with a long Coca-Cola history. We look forward to serving our customers and consumers from this new, state-of-the-art facility.”

The new facility will handle sales and distribution of Coca-Cola products in a 21-county area stretching from Owen County to Hardin County in Kentucky and Jefferson County to Harrison County in Indiana. The company currently has 350 employees working in the Louisville franchise territory. In addition, a new ‘make ready center’, which will handle deployment and refurbishing of vending and other sales equipment, is still under construction and will open later this spring. The facility is located on Global Drive in Southwest Louisville.

 

Advanced Manufacturing, Economic Development, Faster Lane, Transportation, Workforce Development

Ford’s Louisville plant workers to get $19K raise

FL Ford_LogoFord hiring elsewhere means 48% raise for some of its Louisville workers

DEARBORN, Mi., Louisville, Ky. (Feb. 4, 2015) — A $19,000 pay hike is coming to some of the Ford assembly plant workers in Louisville hired under a 2011 union contract. Ford’s business strategy is paying off for the company and employees alike.

Strong January sales of the new aluminum-based F-150 pickup truck are motivating Ford to add 1,550 workers at support facilities for that vehicle in Kansas City and Dearborn, Mich. The number of new jobs surpass a companywide target in the labor agreement for the number of employees paid at Ford’s entry level rate of $19.28 an hour, pushing the most senior of them to the “new traditional” wage of $28.50 an hour.

An estimated 300 to 500 workers in Louisville, Kansas City and Chicago will get the hefty pay hike based on their seniority. Ford does not know exactly how many workers at each location will be affected as its newest expansion is implemented.

The F-150 pickup, part of Ford F-Series, is enjoying its 38th straight year as America’s best-selling truck and 33rd straight year as America’s best-selling vehicle. Ford sold 753,851 trucks in 2014, but January 2015 was the strongest sales month since 2004, which was the company’s best sales year for the F-150 ever. An F-150 pickup was on dealer lots for only 12 days on average – the fastest sales turn time ever. The new F-150 has shifted to an aluminum alloy body rather than heavier steel, a move that trims its weight and improves milage.

“We’re excited about adding more jobs to these facilities for the all-new F-150,” said Jimmy Settles, UAW vice president and director, National Ford Department. “And we’re also excited that Ford continues to make good on its commitment to our UAW members by transitioning entry-level employees to ‘new traditional’ wage status to support their career growth.”

The entry-level pay agreement negotiated as part of UAW-Ford collective bargaining has helped improve Ford’s competitiveness and enabled the company to invest more than $6.2 billion in its U.S. manufacturing facilities, said Bill Dirksen, Ford vice president for labor. Since 2011, Ford has hired more than 15,000 hourly UAW members – exceeding its goal of creating 12,000 hourly jobs in the United States by 2015.

Workers at Ford’'s Louisville Assembly Plant assemble the Escape. With more than 1.2 million vehicles produced in 2013, Kentucky ranks third overall in light vehicle production and first per capita.

Workers at Ford’’s Louisville Assembly Plant assemble the Escape. With more than 1.2 million vehicles produced in 2013, Kentucky ranks third overall in light vehicle production and first per capita.

“It demonstrates the importance of our entry level agreement with the UAW,” Dirksen said. “It has been instrumental in improving our competitiveness. It allowed us to invest more … in the Louisville Assembly Plant and in the Kentucky Truck Plant. It drives jobs growth.” In addition to satisfying consumers – the new F-150 “has been very, very well received” – Ford has done a good job of keeping the promises it made in the 2011 union contract, he said.

However, that deal expires this year, and Ford and the UAW must negotiate a new four-year labor agreement. Of the 1,550 new jobs announced this week, 900 are allocated for Kansas City Assembly and 500 will be added between Dearborn Stamping and Dearborn Diversified, with the remaining 150 jobs going to Sterling Axle. These jobs are in addition to the more than 5,000 hourly jobs Ford added across its U.S. manufacturing facilities in 2014.

Ford has 9,000 employees in Kentucky at LAP and KTP, which together produce approximately 2,000 vehicle a day. LAP turns out the Ford Escape compact SUV and the new Lincoln MKC luxury SUV. KTP builds Ford Super Duty Trucks (F-250, F-350, F-450 and F-550) as well as the Ford Expedition and Lincoln Navigator full size SUVs.

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From the Archive:

• Kentucky plants’ profits fueling Ford global strategy, company exec tells state transportation industry audience (Nov. 2014)

• Louisville-built Ford sales remain strong (Dec. 2014)

 

Advanced Manufacturing, Economic Development, Faster Lane, Interstate Lane, Workforce Development

Is a Volvo plant coming to Kentucky?

volvo-logo-kentucky-plant-manufacturingSwedish car maker Volvo is reportedly considering a move that Ford, GM, and Toyota have already made: Building a plant in the Kentucky.

While there are no official statements by Volvo itself, the Financial Times says anonymous sources report talks between the company and state legislatures in  Kentucky, South Carolina and North Carolina. The Swedish company wants to bolster its North American performance and, besides possible plant construction, is picking a new top U.S. executive to shape up sales.

Talks with legislators center on incentives to build here and get on equal footing with rivals BMW with their South Carolina plant, and Mercedes-maker Daimler and their Alabama operations.

The article also says the Swedish company is appointing a new U.S. top executive to turn around its performance here. It also cites anonymous sources who say the company has been in talks with those three state legislatures about incentives that could be offered for a new manufacturing plant.

Volvo has declined comment, and so has Joe Hall, communications and media officer for Kentucky’s Cabinet for Economic Development.

Two likely mega-sites with appropriate infrastructure where Volvo could build are: a 1,551-acre site in Hardin County, close to Interstate 65, with CSX rail lines and only 45 minutes south of Louisville, and; Christian County’s “I-24 Megasite,” a 2,100-acre spot near Hopkinsville which is also close to I-65 and I-40 and roughly one hour from Nashville.

Kentucky’s cadre of support companies is quite a consideration for Volvo. According to governor Steve Beshear, the state already has roughly 450 auto-related industries and manufacturers employing about 80,000 workers. Besides infrastructure, this also means there is likely a considerable pool of experienced Kentucky workers available for Volvo.

Related News:

toyotaimages        Toyota recognized with 12 safety awards

FL Ford_LogoLouisville-built Ford sales remain strong

Advanced Manufacturing, Workforce Development

Archer Daniels Midland to hire 200 in N.Ky.

ERLANGER, Ky. — Archer Daniels Midland Co., a global agriculture and food ingredient company, has announced plans to establish an information technology center in Erlanger that will create 200 new jobs. ADM recently purchased WILD Flavors GmbH, an Erlanger-based company that is one of the world’s leading suppliers of natural ingredients to the food and beverage industry. WILD has been in operation in Northern Kentucky since 1994 and currently employs around 430 people.

ADM plans to place the 200,000-s.f. IT center inside an unoccupied building on WILD’s campus, where it will serve as an important hub for the company as ADM’s IT support and infrastructure continues to grow and its global business expands.

“We considered other locations, but in the end, co-locating this facility with our WILD Flavors offices in Erlanger offered us a wealth of advantages,” said Marty Schoenthaler, ADM chief information officer. “One of the ways in which ADM is making ongoing progress in enhancing returns is through careful consideration of costs throughout the business. In this case, we are controlling costs by using available space in a building we already own, and also benefiting from tax incentives offered by the commonwealth when, among other things, we hire new employees. We will also be able to recruit from a strong local talent pool in northern Kentucky, and we will have quick and easy access to a major airport.”
ADM is one of the world’s largest agricultural processors and food ingredient providers, with more than 33,000 employees serving customers in more than 140 countries.