March 15, 2006
It's Georgia for Kia
After a search that took almost two years, Korean automaker Kia has chosen West Georgia for its first U.S. automotive assembly plant. The deal is huge for the Peach State as it begins to rebuild its automotive sector after Ford and GM announced in the winter quarter they are closing their Atlanta area assembly plants. The site is a greenfield location on Interstate 85 in Troup County, specifically West Point, Ga. The location is about 20 miles from Hyundai's largest supplier, Mando, which operates a large plant and its North American headquarters in Opelika, Ala. Hyundai is Kia's parent company. Kia considered sites in Mississippi and the Florida Panhandle before choosing West Georgia. The deal is expected to include more than $1 billion in investments and will eventually result in over 2,000 employees. Kia represents the seventh major foreign-owned auto assembly plant to be built in the Southern Auto Corridor since 1992.
Kia is the Once-in-a-Lifetime Opportunity for Georgia
What an opportunity for Georgia! What an opportunity for Kia! The marriage between the Peach State and the upstart Korean automaker is a perfect fit. Landing Kia's first North American assembly plant within 120 days of the announcements made by GM and Ford that they are closing their assembly plants in the Atlanta metro is a huge win for the state of Georgia. The West Georgia location is also a perfect location for Kia. In January of 2004 we wrote, "If Kia builds in the Southern Auto Corridor, it won't be next to Hyundai's (Kia parent company) Montgomery, Ala. plant. But it won't be far from it either." West Point, Ga., Kia's choice, is 80 miles from Montgomery. The location will help both Hyundai and Kia use economies of scale that currently exist in the central Southern Auto Corridor in order to cut cost and control quality like no two plants anywhere else in country.
Mississippi and Lowndes County-Proposed Incentive Package Believed to be the Largest in U.S. Economic Development History
While Kia Motors didn't take them up on their offer, it was reported that Mississippi, led by U.S. Sen. Trent Lott and officials in Columbus, Miss., put together an incentive package for the Korean automaker that totaled nearly $1 billion. Approximately $240 million would have come from federal tax concessions as a result of the new Gulf Opportunity Zone Act. Another $280 million would have come from the state of Mississippi, $175 million in tax incentives from the local Lowndes County government and a variety of other inducements, for a grand total of nearly $1 billion. That figure, we believe, is the largest incentive package ever put together in U.S. economic development history. Even though the total package was published by several sources, we believe Kia officials never discussed the incentives with Mississippi political and economic development officials. In fact, we believe negotiations between Kia and Mississippi ended in November of 2005 when the two parties couldn't come to an agreement on building the plant in Meridian, Miss.
Palm Beach County Votes to Move Scripps to Jupiter
Although $116 million has already been spent on construction on the edge of the Everglades, Palm Beach County commissioners have voted to move the Scripps Research Institute farther north to Jupiter. Construction on the proposed 2,000-acre biotech park at the original Mecca Farms site was halted in 2005 after a federal judge ruled that key roads and support infrastructure couldn't be built until a broad environmental impact analysis was completed. Scripps and the county will now renegotiate a contract for the new site at Florida Atlantic University's John D. MacArthur campus in Jupiter's Abacoa community. More than 100 Scripps scientists, lab assistants, and other employees are already working in temporary labs there. For more information on Scripps in Florida and the South's life sciences industries go to www.BioIndustrySouth.com
MeadWestvaco Realigns Packaging Businesses and Establishes New Headquarters in Virginia
On February 15, MeadWestvaco Corp., a Fortune 500 company, announced a plan aimed at strengthening the company's position in packaging in key global markets and driving cost and operational efficiencies. The company's plans include realigning its packaging business, establishing a new research-focused Packaging Innovation Center in Raleigh, N.C. and consolidating its U.S. corporate locations and key administrative functions into a new headquarters in Richmond, Va. The relocation of MeadWestvaco's headquarters from Stamford, Conn., to Richmond will result in an estimated 400 new jobs in Virginia's capital city. The new center in Raleigh will create about 200 new jobs. MeadWestvaco was created in 2002 when the Mead Corp., and Westvaco Corp., merged. The company employs over 22,000 people worldwide and has several operations in the American South.
North Carolina Research Campus Breaks Ground
The 350-acre biotech center being built in downtown Kannapolis, N.C., by David Murdock and several universities in the Tar Heel State broke ground in the winter quarter. The first building, a 311,000-square-foot core lab facility, will house researchers that will focus on nutritional and agricultural studies. Go to www.BioIndustrySouth.com for more information on the life sciences industry in the South.
No Word yet from U.S. Army Corps of Engineers on New Orleans Rebuilding
The recovery from Hurricane Katrina has been more than tough in the areas affected. The disaster was so large that it's hard for any government that's involved to point to great progress, even seven months later. Some are asking why there's been little if any rebuilding of damaged structures. Well, that's up to the Army Corps of Engineers. As of this writing, the Corps has not given approval to anyone in the New Orleans area to rebuild. The holdup centers on the elevations where rebuilding can take place. Word is it may be June before the Corps reveals the specific elevations where building can take place.
Port of New Orleans Activity Reaches Pre-Katrina Levels
Port of New Orleans CEO Gary LaGrange reported in late February that activity at the port has reached 100 percent of pre-Hurricane Katrina levels, even though only 70 percent of the port's facilities are operational. The port averaged about 20 ships a week prior to Katrina and during the week of February 20, about 30 ships were expected to call. The Port of New Orleans sustained about $84 million in damage from Hurricane Katrina.
South, Florida Dominate Milken Index
Markets in the South, particularly in the state of Florida, continue to dominate the Milken Institute's Best Performing Cities Index. Nine of the ranking's top 10 markets are located in the South and six of those are located in Florida. The annual ranking is based on job growth.
Milken's Best Performing Cities 2005
1. Palm Bay-Melbourne-Titusville, Fla.
2. Cape Coral-Fort Myers, Fla.
3. Naples-Marco Island, Fla.
4. McAllen-Edinburg-Mission, Tex.
5. Deltona-Daytona Beach-Ormond Beach, Fla.
6. Orlando-Kissimmee, Fla.
7. Washington-Arlington-Alexandria, DC-Va.-Md.-W.V.
8. Fayetteville-Springdale-Rogers, Ark.-Mo.
9. Fort Lauderdale-Pompano Beach-Deerfield Beach, Fla.
10. Riverside-San Bernardino-Ontario, Calif.
Gulfstream Adding Over 1,000 New Workers at Savannah, Ga. Plant
Aircraft manufacturer Gulfstream, a division of General Dynamics, announced in early March it will invest $300 million at its facilities in Savannah, Ga. The deal is expected to create about 1,100 new jobs in five-to-seven years. About 5,000 workers are employed in Georgia by Gulfstream.
Another HQ for Nashville
Samick Music Co., is relocating its headquarters, manufacturing and distribution operations from California to the Nashville metro town of Gallatin. Samick, which makes musical instruments and is one of the largest piano manufacturers in the U.S., is building a 220,000-square-foot facility in the Gallatin Industrial Park. The company is expected to create more than 150 new jobs.
UK Motor Testing Company coming to Louisiana
U.K.-based Laurence, Scott & Electromotors is planning a new plant in Lake Charles, La. The company makes electric motors and electro-mechanical power transmission products. The new Louisiana plant will be used for manufacturing and assembly of water treatment and pumping equipment. LSE expects to create about 60 new jobs.