January, 2010 Archives

Morrell Closing Sioux City Meatpacking Plant

Morrell Closing Sioux City Meatpacking Plant

John Morrell & Co. has announced it is permanently closing its hog processing and fresh meat fabrication plant located in Sioux City, Iowa, effective April 20, 2010. The Sioux City plant processes hogs and produces boneless loins and other fresh pork products. John Morrell is a subsidiary of Smithfield Foods, Inc. “We deeply regret having to close this facility,” said Joseph B. Sebring, president of John Morrell. “We recognize that layoffs and plant closings are difficult for everyone concerned. But at the same time, we believe this is a necessary business decision. The Sioux City plant is one of the oldest, most outdated and least efficient plants in the Smithfield system,” he continued. The Sioux City plant closure will affect approximately 1,450 hourly and salaried employees. The company will confer with union officials regarding this transition. The company will comply with the federal Worker Adjustment and Retraining Notification Act (WARN), and will provide employees with a 90-day notification of the plant closure. Under the WARN Act, the company also will notify state dislocated worker units so that they can promptly offer dislocated worker assistance. WARN Act notices, where appropriate, are being issued today. “The consistent quality of our products is extremely important and is a daily priority. We are constantly improving our facilities and equipment to ensure a safer, higher-quality product. In this case, the Sioux City plant was constructed in 1959 and would require significant capital expenditures to outfit it with the next generation of pork processing technology. In this adverse business environment those capital needs simply cannot be met,” said Mr. Sebring. “Furthermore, the Sioux City plant design, layout, and footprint severely limit our operating and sales flexibility and our ability to produce value-added packaged meats products and maximize production throughput. The refrigeration system is antiquated and inefficient and the plant lacks any significant refrigerated storage space,” he continued. The company said that three other Smithfield plants—located in Sioux Falls, SD, Denison, IA, and Crete, NE – have the capacity to partially absorb the number of hogs that are currently being processed at Sioux City and that it will transfer some of the Sioux City production to those plants in the near term. This partial transfer of production capacity will not require the company to secure additional employees. In addition, the company stated that it will honor all production contracts at Sioux City and that Smithfield has no further plans for plant closures in the foreseeable future. With sales of $12 billion, Smithfield Foods is the leading processor and marketer of fresh pork and packaged meats in the United States, as well as the largest producer of hogs.


Renewable Energy Incubator Opens in Utah

Renewable Energy Incubator Opens in Utah

Utah’s first business incubator focused on renewable energy has begun operations at University Plaza, near the campus of Dixie State College. A collaborative effort spearheaded by the Utah Science Technology and Research initiative, the Southern Utah Information Technology and Renewable Energy Incubator is designed to help Utah join several other states and cities investing in the start-up of new businesses focused on green technology and alternative energy. The incubator’s first tenant is information technology company Truescale Technologies, a “cloud computing” start-up. The company started with two employees and is adding three more. Tenants will rent space at approximately market rates, but get many free benefits, including business mentoring from successful executives, use of conference rooms and classrooms and free high-speed Internet. The incubator is a collaborative effort of USTAR, the Dixie Business Alliance, the Small Business Development Center, SEED Dixie, Washington County Economic Development, Dixie State College and Dixie Applied Technology College.



Help for Haiti

We have all been shocked by the scenes of devastation that have emerged from the disaster in Haiti. The 7.0 magnitude earthquake which struck the Caribbean nation on Tuesday has leveled Port au Prince, a city of three million. Thousands of people have been killed or injured, and food, water and medical supplies are quickly running out. The United States is mobilizing a massive relief effort and dozens of major charities have set up special hot lines to receive donations. Here is a link to some of the organizations that are collecting donations for Haitian relief: www.google.com/relief/haitiearthquake/#utm_campaign=en&utm_source=en-ha-na-us-sk&utm_medium=ha&utm_term=haiti%20donations We encourage everyone to give as much as they can.


Report: Tax Incentives Waste Money, Don’t Create Jobs

Report: Tax Incentives Waste Money, Don’t Create Jobs

A study funded by Heinz Endowments and undertaken by non-profit Good Jobs First has questioned the value of Pennsylvania’s use of large tax breaks to lure high-tech business to the state and keep existing players from relocating. The 94-page study, called “Growing Pennsylvania’s High Tech Economy: Choosing Effective Investments,” released today, compared Pennsylvania’s incentives and job-creation results with numbers from Maryland, New Jersey, New York, Ohio, North Carolina and West Virginia. The report concluded that a reliance on tax incentives is costly, risky and potentially ineffective in creating long-term job growth. The survey drew upon 20 years of Pennsylvania employment data, and found that since 1990 nearly all of the growth in the state’s high-tech economy has come from companies founded in the state. Special tax rates or incentives designed to lure new companies across state lines have proved to be ineffective, the report said, finding that Pennsylvania’s tax rates are about average for the group of state’s surveyed. Companies are more concerned with cost factors including labor and occupancy than tax-based incentives, according to the Good Jobs First report. “Tax breaks are windfalls, not determinants, and are therefore wasted,” the study stated. According to the report, Pennsylvania saw a net gain of high-tech companies from 1990 to 2006, with about 1,241 moving into the state while 1,198 moved out. However, during the same time period, the Keystone State lost 2,850 related jobs. Project director Greg LeRoy told a press conference announcing the report’s results that “everything matters more than [taxes] do.” The Good Jobs First report suggested that focusing on Pennsylvania’s existing strengths—such as the nuclear and civil engineering sectors and biomedical, both strong in the Pittsburgh area—would be more effective as a tool for job creation. The report was critical of the approach Pennsylvania took to Westinghouse Electric’s expansion in Cranberry. To make sure the project didn’t go to North Carolina, Pennsylvania enacted a new Strategic Development Areas program that provided tax exemptions and incentives for companies employing at least 500 workers and expending more than $45 million in capital investments within three years. As a result of the new incentive, Pennsylvania awarded Westinghouse $3 million a year in local tax breaks for 15 years, the report said. The Good Jobs First study claimed the tax breaks played no role in Westinghouse’s decision to expand in Cranberry and “bypassed the opinion of taxpayers.” But “taxpayers were not able to weigh whether the incentive had to be so large, or whether alternative investments in the engineering and technical talent […]


ESolar to Build Solar Thermal Plants in China

ESolar to Build Solar Thermal Plants in China

ESolar Inc., Pasadena, CA,  signed an agreement last week to build a series of solar thermal power plants in China with a total capacity of 2,000 megawatts. ESolar’s deal, one of the largest renewable energy projects to date, comes a few months after an Arizona company, First Solar, secured a contract to build a huge photovoltaic power plant in China. China is emerging as a major market for renewable energy as well as a leading producer of alternative energy equipment and components. “They’re moving very fast, much faster than the state and U.S. governments are moving,” said Bill Gross, ESolar’s chairman, told the Los Angeles Times. Under the agreement, ESolar will provide China Shandong Penglai Electric Power Equipment Manufacturing Co. the technology to build solar “power tower” plants over the next decade. Those solar farms would generate a total of 2,000 megawatts of electricity; at peak output that would be equivalent to a large nuclear power plant. The initial project, which includes a 92-megawatt solar power plant to be built this year, will be located in the 66-square-mile Yulin Energy Park in the Mongolian desert in northern China. The ESolar announcement came at the same time that the Obama Administration announced it is awarding $2.3 billion in tax credits aimed at promoting green jobs. The funds from the 787-billion-dollar stimulus bill approved by Congress last year will provide credit for investments in manufacturing facilities for clean-energy technologies. Officials said the projects are expected to create more than 17,000 jobs. The awards will cover 183 manufacturing facilities for clean energy products across 43 states, officials said. They include aid for products ranging from solar energy technology and wind turbines to electrical grid improvements. Officials said some 30 percent of these projects would produce new products or services in 2010, and that must be placed in service by 2014. “Building a robust clean-energy sector is how we will create the jobs of the future,” President Obama said. He added that the fund “will help close the clean-energy gap that has grown between America and other nations while creating good jobs, reducing our carbon emissions and increasing our energy security.”


From Motown to TechTown

From Motown to TechTown

Much has been made in recent months about the gloomy economic landscape in Detroit. Based on double-digit unemployment statistics, Michigan and its auto-based economy have been at the epicenter of the Great Recession. We are pleased to report that the denizens of Motown are not wasting time dwelling on the drumbeat of bad news. They are busy laying the foundation for a Renaissance of economic development. Nowhere is this trend more evident than at TechTown, a thriving research and technology park established by Wayne State University, General Motors and the Henry Ford Health System. TechTown, part of the Woodward Technology Corridor SmartZone, aims to become nothing less than the world’s foremost business incubator for emerging high-tech industries including advanced engineering, life sciences and alternative energy. Here are some highlights: — TechOne, the 100,000-square-foot business incubator facility, now hosts 70 growing companies. — More than 30 high-tech startups have enrolled in TechTown’s business accelerator programs. — NextEnergy, an alternative energy incubator founded to encourage the commercialization of emerging energy technologies, opened its $12-million research facility in TechTown. — Asterand, a biomaterials bank and TechTown’s first tenant, has become an international, publicly traded company on the London Stock Exchange. What began as a 12-acre research park is now spread over 43 acres. Wayne State University has laid the groundwork for further expansion by purchasing the former Dalgleish Cadillac building on Cass Avenue for $1 million. The building was constructed in 1902 as the first Cadillac plant, and the Dalgleish family has been selling Cadillacs there since 1964. The dealership building, which was closed by General Motors is 30,000 square feet larger than TechOne, TechTown’s current business incubator facility at 440 Burroughs Street. TechTown deferred plans to renovate another large former Cadillac building just a block south of the Dalgleish Cadillac—the Cadillac sales headquarters, known more recently as the Wayne State University Criminal Justice Building. The building, originally planned to be TechTwo, would cost more than $10 million to renovate. “It’s a beautiful old building and it will be phenomenal when we ever get it finished, but we can’t do it now,” TechTown Executive Director Randal Charlton said. The 107-year-old, three-story former auto plant with a large basement will be made into office and lab space to meet the needs of both new and existing companies looking to set up shop in an affordable business environment. The TechOne facility has kept a waiting list of potential tenants, some of whom have taken FastTrac entrepreneurial training courses, which are the keystone of the FastTrac […]


Dubai Reaches for the Sky

Khalifa Bin Zayed, president of the United Arab Emirates and ruler of Abu Dhabi, no doubt was honored when Dubai decided to put his name on the tallest skyscraper in the universe. But President Zayed can be forgiven if he was somewhat distracted as the 168-story Burj Khalifa tower officially was opened this week. That’s because he was busy averting a new international financial crisis by bailing out Dubai to the tune of $10 billion, the first installment of an estimated $60 billion in overdue bad paper the tiny emirate has piled up during the real estate boom. As the new decade arrived, Dubai unveiled it crown jewel of excess—all 828 meters (about 2,800 feet) of it, 319 meters higher than the previous record-holder, Taipei 101, and almost twice as tall as New York’s venerable Empire State Building. The $1.5-billion Burj Khalifa is the centerpiece of a decade-long construction boom that has transformed Dubai from a desert outpost to a futuristic city that sits like a luxury mirage amid the sand dunes. The mammoth structure, which looks a bit like a telescoping sewing needle, took six years to build. It can be seen for almost 100 miles, meaning oil workers in Abu Dhabi will have something to gape at as they put in overtime to pay off Dubai’s staggering debt. Late last year, Dubai sent shock waves through the world’s battered financial capitals by asking for a freeze on payments owed on $26 billion in debts. The skyscraper’s architects, Chicago-based Skidmore, Owings & Merrill, have called the Burj Khalifa “a bold global icon that will serve as a model for future urban centers.” However, Dubai’s latest status symbol is getting some mixed reviews. Jim Krane, author of “City of Gold: Dubai and the Dream of Capitalism” told CNN: “If you look at it, it’s a really bad idea. It uses as much electricity as an entire city. And every time the toilet is flushed they’ve got to pump water half a mile into the sky.” The telescopic shape also is problematic, Krane noted. “The upper 30 or 40 floors are so tiny that they’re useless, so they can’t use them for anything else apart from storage. They’ve built a small, not so useful storage warehouse half a mile in the sky,” he said. Sounds like a good place to put all those predictions from the early 2000s that the real estate boom would never end.


Schulz Invests $300 Million in MS Pipe Plant

Schulz Invests $300 Million in MS Pipe Plant

Wilh. Schulz GMBH has decided to locate a new $300-million seamless pipe manufacturing facility in Mississippi, Gov Haley Barbour and officials from Schulz announced on Monday. The company, a global supplier of piping components headquartered in Krefeld, Germany selected Tunica County, MS, as the location for its new pipe manufacturing plant. The company’s Mississippi division, which will be known as Schulz Xtruded Products (SXP) will create 500 new jobs at the facility over the next five years. The Tunica County operation will be the company’s first production facility in North America. Gov. Barbour welcomed the industry leader to Mississippi and commended company officials for their commitment to doing business in the state and for the jobs they are creating in the Mississippi Delta. Barbour reportedly asked the Mississippi state legislature to enact a special package of incentives to seal the deal with Schulz. MDA Executive Director Gray Swoope said the company’s new facility in Tunica County will employ state-of-the-art pipe manufacturing processes. The German company was attracted to Mississippi’s skilled and dedicated workforce, he added. Schulz produces and supplies stainless steel and alloy steel seamless pipe products, including seamless and welded pipes, fittings such as elbows, tees, reducers, caps, bends and flanges, and specialized pipe components. Established in 1945, the company is a recognized leader in the industry, specializing in serving the up- and downstream oil and gas sectors and the nuclear and fossil fuel power plant industry. The company also serves the water treatment industry, with a focus on desalination, as well as facilities in diverse areas of the chemical industry.