6 years ago
The U.S. economy grew by its fastest pace in six years in the fourth quarter of 2009, according to the latest government statistics. The government estimates that the nation’s gross national product surged by a 5.7 percent annual rate. The economy expanded by an annual rate of 2.2 percent in the third quarter of 2009, the first positive jump since the recession took hold at the end of 2007. At its nadir, the U.S. economy contracted by 6.4 percent in the first quarter of 2009. Even with the fourth quarter surge—which is an estimate and may be downgraded slightly when the actual numbers are crunched—the U.S. economy contracted by 2.4 percent overall in 2009, its biggest drop in 63 years and the first annual decline since 1991. Despite the robust fourth quarter numbers, economists are hesitating to declare an official end to the recession, a determination that will wait until an analysis by the National Bureau of Economic Research, which could take several months. Nevertheless, two consecutive quarters of positive growth traditionally signal the end of a downturn. Analysts said the latest growth has been fueled by a turnaround in inventories, which were slashed by businesses in late 2008 and early 2009. Roughly 3.4 percent of the fourth quarter growth was attributed to the change in inventories, while the balance was largely due to a spurt in auto production and a jump in the value of exports. The GDP report did not attribute specific growth to federal stimulus programs, but tax cuts and spending by businesses that received stimulus funds are believed to have impacted positively on the expansion. Economists cautioned that while the new growth numbers indicate that the recovery has taken hold, the pace of the growth may not be sustained because it has been driven largely by temporary factors.
The Columbus Partnership, an organization made up of 35 top business executives from the Central Ohio region, is recommending the creation of new group—called Columbus2020—to spearhead efforts to retain businesses and establish the area as a technology center. According to a report in Business First of Columbus, Columbus Partnership CEO Alex Fischer laid out a plan for the newly proposed organization this week at a meeting of the Columbus Metropolitan Club. Columbus2020’s goals will include helping the region become what Fischer called a “Top 10 economic development community,” creating 180,000 jobs and increasing per capita income by 40 percent within the next 10 years. “This is a new economic development paradigm,” Fischer said, adding that the idea for the new organization developed after consultants McKinsey & Co. completed a study last year looking at best practices in economic development. Fischer said McKinsey found the Columbus region didn’t invest as heavily in economic development initiatives as rivals Nashville, TN and Austin, TX. It also found the community needed to focus on retaining and expanding businesses, attracting new ones, creating companies and expanding the civic infrastructure. Fischer projected that a Columbus2020 team will be put in place over the next three months, money will be raised and vice president-level executives will be recruited and hired. Fischer told Columbus Business First that the new organization would act as coordinator and clearinghouse for regional economic development efforts, although he said a structure for the group has yet to be finalized. Many in the region see the Columbus Partnership as a group of business executives with too much power and influence, Fischer said, so Columbus2020 would not operate under its direction. Fischer said the partnership plans to present more details about the plan during the Columbus Chamber’s annual meeting Feb. 24. A Web site for the organization has been established at columbus2020.org.
We were cruising down to work on the Garden State Parkway this morning in our 2009 Toyota Corolla when a disturbing bulletin was broadcast over the car radio. The announcer informed us that Toyota has halted U.S. production and sales of eight of its most popular models, including Camry and Corolla. The world’s largest carmaker is trying to determine why the gas pedals on its cars keep getting stuck in the acceleration mode, causing the cars to speed up on their own. Two months ago, Toyota recalled millions of its 2009 and 2010 vehicles. At that time, the Japanese auto giant said it thought the problem was due to bulky floor mats accidentally trapping the gas pedals. Unfortunately for Toyota, while they were busy redesigning their killer floor mats four people riding in a Toyota Avalon near Dallas died on Dec. 26 when the car suddenly accelerated and they couldn’t stop it. Having heard the original warning from Toyota, the driver had placed the floor mats in the trunk of the car before getting behind the wheel. This scary news was bad enough, but it got worse when the radio announcer said Toyota is telling motorists not to bring their cars back to their friendly Toyota dealership until the carmaker can figure out what is causing the problem. However, Toyota wants to assure its customers that the problem is “rare.” Sort of like holding the winning ticket in the Mega-Death Lottery. So if your trusty Corolla suddenly decides to switch to warp drive, stand on the brake pedal and recite the 23rd Psalm. Thank you very much, Mr. Toyota. Our mind immediately flashed back to Audi’s famous “Death Car” debacle. About 25 years ago, the German luxury sports car inexplicably started speeding up and crashing. Audi didn’t blame the floor mats — they blamed the drivers. The carmaker insisted for months that Audi drivers must have been hitting the gas pedal when they thought they were stepping on the brake. Numerous crashes later, it became apparent that human error was not the cause of the problem. The machines were killing people. We don’t remember if Audi every figured out what caused the problem, but we do recall that we didn’t see too many Audis on the road for the next 10 years. We started to envision several scenarios for putting our potentially homicidal Corolla to work for us: — Skip work. Drive to Florida. Call the boss and tell him the car wouldn’t stop until we arrived at Fort Lauderdale, just in time […]
Gov. Bob McDonnell want to invest $50 million to attract businesses to Virginia, bulk up tourism advertising and entice movie makers to the state, according to a report in the Daily Press of Newport News. McDonnell, who took office this month, predicts that the investment can create more than 29,000 jobs and bring in $311 million in tax revenue over the next five years. “I’d say that’s a pretty good deal,” McDonnell told a press conference Tuesday. “Job creation isn’t a partisan issue. You either create them or you don’t.” McDonnell unveiled the economic development package in the State Capitol flanked by about 30 Democrats and Republicans from the state Senate and the House of Delegates. The potential return from the development package was calculated by the Virginia Economic Development Partnership, and Secretary of Commerce and Trade Jim Cheng called the numbers “very conservative.” It’s really pretty straightforward,” he said. “Every one dollar we invest in these programs, we get six back.” McDonnell campaigned for office as “a jobs governor” who would revive the state’s economy. The state currently is grappling with $4 billion in spending cuts and layoffs of public employees are expected. According to the Daily Press, McDonnell would pay for the economic development programs by leaving vacant positions open at the Department of Correctional Education, spending $21 million collected from delinquent taxpayers in an amnesty program and saving another $25 million by reducing how much money the state puts into employees’ retirement plans. The state also would delay buying equipment for the Department of Corrections to save $1.2 million. The governor wants a larger pool of money to lure businesses to Virginia, an additional $3.6 million to promote tourism and $2 million to promote Virginia as a film industry location. McDonnell’s proposal also lowers the threshold for businesses to qualify for tax breaks for hiring and includes a $500-per-job tax incentive for companies that create green jobs.
The growth of wind power capacity in the U.S. is expanding rapidly, according to the annual report of the American Wind Energy Association. Wind power capacity grew by 39 percent in 2009, adding about 9,900 megawatts capable of generating 2 percent of electricity used in the U.S. The wind power capacity expansion was the largest annual jump on record to date, outpacing the 2008 total by more than 18 percent. The Association said the growth of wind power was spurred in part by the federal stimulus package, which extended a wind energy tax credit and provided other investment incentives for wind power generation. The Association noted that much of the momentum in 2009 was due to delivery of huge wind turbines to new wind farms, and warned that a slowdown in new orders due to the recession might impact on the capacity expansion totals in 2010. “The U.S. wind industry shattered all installation records in 2009, and this was directly attributable to the lifeline that was provided by the stimulus package,” said Denise Bode, the American Wind Energy Association’s chief executive. Total U.S. wind power generating capacity now stands at an estimated 35,000 megawatts. Since 2002, the country’s installed base of wind turbines has jumped sevenfold. Despite the jump in U.S. wind power generation, Europe is maintaining a solid lead in this alternative energy category. Europe currently gets about 5 percent of its electricity from wind power. The European Commission has set a goal for the European Union to achieve 20 percent of electricity generation from wind power by 2020. Late last year, China also signaled its determination to become a leading wind power player by announcing that it intends to double its wind power capacity by the end of this year, an investment of $14.6 billion in the development of wind energy.
General Motors is investing $246 million in electric motors and electric drive manufacturing facilities in the U.S. According to Tom Stephens, GM’s vice president for global vehicle operations, the automaker’s electric motor initiative will create at least 200 new jobs. “In the future, electric motors might become as important to GM as engines are right now,” Stephens said in a statement issued this week. “By designing and manufacturing electric motors in-house, we can more efficiently use energy from batteries as they evolve, potentially reducing cost and weight – two significant challenges facing batteries today.” Electric motors under development will be smaller, more powerful and more energy efficient, Stephens added. The first GM electric motors will be used in the next generation of rear-wheel-drive full hybrid vehicles, including the Chevrolet Tahoe hybrid SUV, beginning in 2013. GM was awarded a $105 million grant by the U.S. Department of Energy in August for the construction of U.S. manufacturing facilities to produce electric motors and drive components. In January, GM announced the initiation of lithium-ion battery production at a plant in Brownstown, MI. Batteries made in the plant will be used in the Chevrolet Volt electric vehicle, which is slated to be on the market before the end of this year.
Governor Phil Bredesen and Tennessee Economic and Community Development Commissioner Matt Kisber have announced that Missouri-based Confluence Solar has selected Clinton, TN as the home of their new manufacturing, warehousing and distribution facility. The facility will produce premium quality mono-crystal silicon ingots for photovoltaic solar power generation. The company’s HiCz™ brand products increase the efficiency of solar cells by 15% or more, helping manufacturers of solar panels generate electricity more efficiently at a cost equivalent to or better than can be done using multi-crystal silicon ingot. “Two years ago, we set upon a strategy to make Tennessee a significant player in the solar industry,” said Governor Bredesen. “Since then, we’ve seen more than two billion dollars in capital investment, more than a thousand jobs created, and, with the development of the Solar Farm and existing solar companies located in West Tennessee, we have truly created a statewide solar footprint. The announcement today by Confluence Solar is further proof that Tennessee is recognized as a leader in renewable energy and that a new economic engine is emerging in our state.” “Tennessee’s nationally recognized business climate and their focused solar strategy along with Clinton’s close proximity to Oak Ridge National Laboratory and the new Solar Institute made Tennessee the perfect location for our facility,” said Tom Cadwell, CEO and co-founder, Confluence Solar. “The number of solar industry leaders establishing operations here and the intellectual energy surrounding solar technology provides our company, current investors, and future investors with the confidence that Tennessee is the place Confluence Solar needs to be.” “When both Hemlock Semiconductor and Wacker Chemie, AG announced plans to locate in our state, we said Tennessee would be looking to expand the solar industry throughout the value chain,” said Commissioner Kisber. “The announcement today by Confluence Solar is proof that strategy is working and that Tennessee is now a major player in a growing industry.” The company will develop its facility on a 25 acre site in the Clinton I-75 Industrial Park on Frank Diggs Drive. Initial plans call for a 200,000 square foot building. With its investment, Confluence Solar will qualify for statutory incentive programs including FastTrack Job Training Assistance, FastTrack Infrastructure Development, the Tennessee Jobs Tax Credit and the Super Jobs Tax Credit among others. Governor Bredesen and Commissioner Kisber were joined at the announcement by Confluence Solar’s co-founder John DeLuca, PhD, as well as Jim Highfill, the company’s chief operating officer. Dr. DeLuca, began his career in nuclear materials at Oak Ridge National Laboratory in the early 1970s […]
A group of equity investors led by HSBC agreed this week to provide $350 million in funding to electric vehicle infrastructure start-up Better Place, which plans to deploy nationwide networks of charging points and battery exchange stations in Israel and Denmark by the end of 2011, with smaller regional networks in Australia and California the following year. Better Place, based in Palo Alto, CA, says it is the world’s leading electric vehicle (EV) services provider, catalyzing the transition to sustainable transportation. The company, which has raised a total of $700-million in venture funding thus far, is developing and deploying EV driver services, systems and infrastructure. What the company calls “subscribers and guests” will have access to a network of charge spots, switch stations and systems which optimize the driving experience and minimize environmental impact and cost. “Better Place is a huge experiment in how you sell and fuel vehicles, and these investors are becoming convinced this will make money,” said Rod Lache, an analyst at Deutsche Bank told The New York Times. “It is a financial validation. Now we need to see technical validation and consumer validation.” According to reports, thus far only one automaker—Renault-Nissan has expressed support for Better Place’s battery exchange concept. Renault has committed to producing a single electric vehicle model with swappable batteries. Several other automakers have described the idea as unworkable while advanced battery technology is still in development. Many of the batteries that the automakers are deploying have liquid cooling systems and are being designed as an integral part of the vehicle structure. At a press conference on Monday, Better Place CEO Shai Agassi said the company expects to raise enough money to allow the company to operate and deploy until it reaches profitability in 2013. Agassi is an Israeli-American software executive who founded the company in 2007. “We’ve demonstrated that our network is deployable,” Agassi said. However, analysts indicated that a successful charging network will require billions more in financing. In addition to the $125 million from HSBC, $225 million will come from Morgan Stanley Investment Management, Lazard Asset Management and Better Place’s original investors, which include Israeli companies and VantagePoint Venture Partners in Silicon Valley. Better Place is scheduled to make its commercial debut in 2011 in Israel and Denmark.
In the past few months, we’ve written about numerous plant closings and consolidations. So it was very refreshing to receive this report from the Bluegrass State, describing how a management team at a soon-to-be-shuttered Komatsu plant in Lexington took matters into their own hands—the Komatsu managers teamed up with the Bluegrass Business Development Partnership (BBDP) and found another manufacturing concern that was willing to buy the plant and rehire all of its employees, saving 64 jobs. Here is the story, as told by our friends at Commerce Lexington: “Too often our heroes are those that never have a direct impact on our lives. Sure Princess Diana, Pope John Paul II, Steve Jobs and others have contributed wonderful things to society. But can you point to one tangible thing they have done for you? In most cases, the answer will be no. Former employees of Komatsu’s remanufacturing facility in Lexington just may have found their real life heroes in the leaders at Springfield ReManufacturing Corp (SRC). When rumors started circulating that the economic downturn reached home and Komatsu would be closing the Lexington facility, the local management team put their thinking hats on. They knew that Komatsu wouldn’t make the decision lightly, so there was no chance in changing their minds. They also knew that there was a need for their business and they were profitable, even if their specific line of business didn’t fit into Komatsu’s new plan. Certainly their business had to fit into someone’s plan. It was in March 2009 that Rob Shear, General Manager of the Lexington plant teamed up with a manager from Komatsu’s Chicago office and approached corporate executives about finding a buyer for the Lexington plant. After much research, it seemed that Springfield ReManufacturing Corp (SRC) could be a perfect fit. SRC is the market leader in remanufacturing for construction and agricultural equipment. They have also founded and invested in more than 35 separate companies that do everything from consulting to packaging to building high-performance engines. SRC is known as being an employee-owned company and the culture of ownership permeates the entire organization from the CEO to the shop floor. A key part of this culture is business education that is regularly promoted throughout the company to help everyone understand the financials, which are published in visible locations throughout the plants. This culture has made the company very successful. So successful that Jack Stack, President and CEO of SRC has written two books, The Great Game of Business and A Stake In the Outcome, detailing the business and management techniques practiced and […]
The South Carolina Department of Commerce and the Economic Development Partnership have announced that MTU Detroit Diesel Inc. is planning to establish the company’s new manufacturing facility in Aiken County. MTU Detroit Diesel Inc., a subsidiary of the German-based and stock market listed Tognum Group, anticipates that its expansion project will require a $45 million investment and the creation of 250 new jobs. The Tognum Group produces propulsion systems and distributed energy systems based on diesel engines, gas engines, gas turbines and fuel cells for military, marine, rail, agriculture, heavy industrial and power generation applications. MTU Detroit Diesel has selected the former SKF building in Sage Mill Industrial Park in Aiken County as the potential location of its new manufacturing operations. The company is currently in a due diligence process on the property, which should be completed within the next two months. Depending on the results of the due diligence process a formal announcement is expected at that time. The Aiken County Council will meet on Tuesday, January 19 to vote on an agreement between the County and MTU Detroit Diesel Inc., which will be available once the company formally selects Aiken County for its expansion project. With the new operations, MTU Detroit Diesel plans to produce general and special purpose diesel engines for use in marine, rail, land and power plant applications. “MTU is a worldwide leading brand for diesel engines and propulsion systems for a range of applications, and the company’s consideration of Aiken County for its new operations is another indication that our state continues to be highly competitive within the manufacturing industry. We are confident that MTU will find Aiken County and South Carolina to be an ideal location for their new operations and we look forward to the progression of this project,” said Joe Taylor, Secretary of Commerce. Ronnie Young, Chairman of Aiken County Council, commented, “In these times of high statewide and local unemployment, we are very appreciative of MTU’s consideration of Aiken County. Aiken County Council has worked hard to bring quality jobs to our community and MTU will be an excellent corporate neighbor upon the successful completion of the due diligence phase. The SKF building has been vacant for over three years and it would be good to have a prestigious international company bring its operations to Aiken County.” MTU Detroit Diesel Inc. is the North American regional headquarters of MTU Friedrichshafen GmbH, the core company of Tognum Group. It supplies diesel engines and complete propulsion systems for ships, heavy agricultural and […]