Fast Lane: November 2015

By wmadministrator

ASHLAND: AK Steel idles 800 workers, says foreign mills dumping in U.S.

AK Steel has announced that it intends to temporarily idle the blast furnace and related steelmaking operations at its Ashland steel mill, beginning in December. The move will impact up to 800 of the facility’s 940 employees.

The Ohio-based company cited “challenging domestic market conditions” as the reason behind the decision and said that if market conditions do not improve, the idling could last more than six months.

“We are taking this necessary step due to the onslaught of what we believe are unfairly traded imports of carbon steel that have been flooding our shores,” said AK Steel Chairman, President and CEO James L. Wainscott. “These imports have substantially reduced order intake rates, production rates, shipment volumes and selling prices. We will continue to closely monitor market conditions and run our overall operations as efficiently as possible to continue to meet our customers’ needs.”

AK Steel, along with other domestic steel companies, has filed anti-dumping and counter-vailing duty trade cases with the International Trade Commission with respect to coated, cold-rolled and hot-rolled carbon steel products in an attempt to combat foreign imports.

Ashland Works produces carbon steel slabs as well as hot-dip galvanized and galvannealed coated steels. The hot-dip galvanizing line – which primarily services automotive customers – will not be idled.

The company said it has enough steelmaking capacity at its other plants to meet customer requirements and does not anticipate any interruptions in shipments to its customers.

CORBIN: Decline in coal cited in CSX decision to close corbin rail shops

The CSX rail company announced in October that it is closing its mechanical shops in Corbin, a decision that will affect approximately 180 active CSX employees. That figure represents approximately 50 percent of the total CSX workforce in Corbin.

The shops at Corbin are primarily used to maintain, inspect and service locomotives and rail cars for coal trains moving from central Appalachia to the eastern United States. The decision to close the mechanical shops is tied to the significant decline in the region’s coal traffic.

CSX is also closing its train operations in the East Tennessee town of Erwin, citing the same issue. Approximately 300 Erwin employees will be affected in that shutdown.

The company said that a “combination of low natural gas prices and regulatory action has significantly decreased CSX’s coal movements over the past four years, with more than $1 billion in coal revenue declines during that time.”

The Corbin rail yard will remain open and train operations there will continue, with approximately 100 engineering and transportation employees remaining to support and manage yard traffic and a small number of mechanical employees remaining to support train operations.

CSX said Corbin will continue to be an important part of its network for the movement of automobiles, consumer products and other freight.

Many Corbin employees affected by the closing will be eligible for jobs in higher-demand areas on the CSX network, the company said.

ELIZABETHTOWN: TMS AUtomotive to add new $5M facility in Bowling Green

Elizabethtown-based TMS Automotive is investing $5 million to locate a facility at the Kentucky Transpark in Bowling Green, creating 38 new jobs.

TMS Automotive offers industrial clients a variety of specialized services, including parts washing; rust inhibitor applications; parts sorting; packaging; warehousing and distribution; and minor contract assembly.

Adding a facility in Bowling Green will put TMS Automotive in closer connection with Bowling Green Metalforming and Cannon Automotive, allowing those businesses to curtail shipping costs.

With TMS Automotive’s Elizabethtown location operating at full capacity, the additional facility also will allow the company to take on a much larger demand for products.

TMS Automotive has served Kentucky since 2007 as a distribution provider and materials handler for automotive parts.

Farmington: Innovative fishery turns invasive carp into export product

State and local officials gathered in Graves County on Oct. 6 to celebrate the opening of Blue Shore Fishery, a new Kentucky company that is turning the area’s invasive carp problem into the foundation of a wholesale foods business.

Blue Shore has invested more than $1.3 million in a former catfish-processing facility that will be used to process Asian carp caught by local commercial fishermen from rivers and lakes throughout Western Kentucky. Asian carp were initially brought to this country to clean up algae but have since created a severe problem, overpopulating and crowding out native fish.

Blue Shore will use the locally caught carp to create surimi, a product used in crab sticks, fishcakes and other foods. The company plans to sell to wholesale markets in the U.S. and overseas, particularly Asia.

The operation brings 66 new jobs to the community.

Blue Shore also operates two other facilities in Kentucky: RCB Fish Co. in Ledbetter and Fin Gourmet in Paducah, a research and development operation.

GEORGETOWN: 1st U.S.-Made lexus rolls off the line; toyota capacity now 550,000 cars annually in Ky

Community and state leaders joined Toyota officials in Georgetown on Oct. 19 to celebrate the unveiling of the first Lexus to be built in the United States.

Toyota Motor Manufacturing Kentucky’s (TMMK) production of the luxury-model Lexus ES 350, the top-selling Lexus sedan worldwide, is creating 750 new Kentucky jobs and represents an investment of $360 million.

The expansion of the Toyota Georgetown plant will enable TMMK to produce approximately 50,000 Lexus vehicles a year. In addition to the Lexus ES 350, the Georgetown facility – which is Toyota’s largest manufacturing facility outside Japan – also produces the Toyota Camry, Camry Hybrid, Avalon and Avalon Hybrid, as well as 4-cylinder and V6 engines. With the addition of the Lexus model, the plant’s capacity increases to more than 550,000 per year. With the additional personnel added to handle the Lexus production, the Georgetown plant now employs more than 7,500 people.

Since opening the Georgetown plant in 1988, Toyota has been a major player in helping to build Kentucky’s thriving automotive industry. The Bluegrass State is currently home to more than 470 automotive-industry companies that employ nearly 86,000 people.

LOUISVILLE: UPS will invest $310M, add 300 jobs at sorting center

United Parcel Service Inc. (UPS) is investing nearly $310 million in an expansion project that will triple the size of its ground package sorting facility in Louisville and nearly double package processing rates.

The expansion will add another 300 jobs to the company’s staff in Louisville, where it currently employs nearly 21,000 people.

Company officials said the 580,000-s.f. expansion is in response to an increase in both e-commerce and traditional retail package volume.

Construction will begin in 2016 and is expected to be complete by 2019. The project will not affect pickup and delivery operations, UPS officials said.

The Atlanta-based company opened its Centennial hub in Louisville in 2008 and the facility has become a vital point in the UPS express network, with 2 million packages moving through the city each day to destinations in more than 220 countries and territories around the world.

The hub facility provides pickup and delivery operations for customers in Louisville and surrounding counties and serves as a transfer point for trailers moving to destinations beyond Kentucky. It also supports end-of-runway express service due to its proximity to the UPS Worldport facility.

LOUISVILLE: Yum! spins off its Chinese operations into separate company

The board of directors for Louisville-based Yum! Brands has unanimously approved a move to make the company’s China division a separate entity, creating two individual, publicly traded companies. Yum! is the parent company of KFC, Pizza Hut and Taco Bell.

Though it will be a separate company, Yum! China will operate as Yum! Brands’ largest franchise, operating under a franchise agreement with predominantly Chinese leadership.

“Over the years, we built our company’s global structure outside of China based on a franchise model that generates stable earnings, high profit margins, low capital investment and strong cash flow conversion,” said Yum! Brands Chairman David Novak. “At the same time, our China business, which has been predominantly equity-owned, generates substantial operating cash flow annually, with tremendous ability to invest in its own growth.”

Yum! was one of the first American quick-serve restaurants to enter the China market, opening its first KFC store there in 1987. Yum! China now operates approximately 6,900 restaurants in over 1,000 cities and Yum! says that with China’s consuming class expected to double from 300 million in 2012 to more than 600 million by 2020, Yum! China has the potential to grow to 20,000 restaurants in the future. The business is on pace to open some 700 new locations in 2015.

However, Yum! has been dealing with fallout from reports last year that it was using tainted meat at some of its KFC locations. That issue scared off many consumers and the company’s third-quarter earnings fell below analysts’ estimates for the China division.

STATE: Financial problems force Kentucky health cooperative to close; 51K Kentuckians affected

Faced with significant financial losses and decreased federal funding,
Kentucky Health Cooperative Inc., a nonprofit health insurance company serving all 120 Kentucky counties, announced in October that it will be closing and no longer offer health insurance plans on kynect, Kentucky’s health insurance marketplace.

“In plainest language, things have come up short of where they need to be,” said Kentucky Health Cooperative interim CEO Glenn Jennings.

The shutdown leaves some 51,000 Kentuckians searching for other insurance options. Open enrollment for 2016 healthcare coverage began Nov. 1.

KHC was formed in an effort to provide more choices in healthcare coverage under the Affordable Care Act (ACA). Kentucky’s co-op – and others like it in states across the nation – has been subsidized by federal money but the recent announcement of a risk corridor reimbursement to the nation’s co-ops of just 12.6 percent (or, for Kentucky, a payment of $9.7 million, from a starting number of $77 million), led to an unavoidable outcome, Jennings said.

That same outcome is being seen in other states as well. As of Oct. 22, Kentucky’s was one of nine state co-ops formed under the ACA to close and that list could very well grow. According to a report from the U.S. Health and Human Services Department released this past summer, only one of the 23 co-ops across the nation (Maine) made money last year.

State officials emphasized that seven carriers are continuing to sell plans on kynect: Aetna, Anthem, Baptist Health, CareSource, Humana, United Healthcare and WellCare. Two insurers, Anthem and United Healthcare of Kentucky, will offer plans to residents in all 120 Kentucky counties.

STATE: Ky’s apprentice program adds 8th chapter, now has 112 companies

The Kentucky Federation for Advanced Manufacturing Education (KY FAME), a partnership of manufacturers and colleges that have teamed up to address the shortage of technically skilled workers in advanced manufacturing, has added a new chapter in the western region of the state.

Through the KY FAME West Chapter, advanced manufacturing technician courses will be provided at Madisonville Community College, Hopkinsville Community College and West Kentucky Community and Technical College in Paducah.

Local companies in the region that are participating in the launch include: Wacker Chemical, R. RAD North America, Briggs & Stratton, Centrifugal Technologies, Baptist Health Madisonville, Vanderbilt Chemical, Progress Rail Services, Hibbs Electromechanical, Air Relief, Integrated Metal Solutions, MVP Group International, International Automotive Components, MRCOOL, ACE Compress Services and GE Aviation.

“I have seen the energizing effects that the mere opportunity of forming a chapter of KY FAME in west Kentucky has brought, and it makes me very optimistic for the future of our region and the commonwealth as a whole,” said Ryan Senter, president of Hibbs Electromechanical and president of the new chapter. “With industry in the driver’s seat, the KY FAME program has enhanced the collaboration between industry, education and government in combining technical education, soft-skills training and career preparedness that will have wide-ranging, positive benefits for students, Kentucky companies and entire communities.”

STATE: Baptist Health will expand and rebrand its health insurance plan

Baptist Health has announced a significant expansion of its health-insurance business with the introduction of new insurance plans for both the Medicare Advantage and individual markets.

For more than 20 years, Baptist Health operated Lexington-based Bluegrass Family Health, covering nearly 80,000 members in Kentucky and parts of adjoining states in the traditional commercial market, offering insurance through employers. In May, Bluegrass Family Health announced that it would be rebranding as Baptist Health Plan and would be headquartered in Lexington. (Baptist Health’s corporate headquarters are located in Louisville.)

Baptist Health Plan’s new Medicare Advantage plan is now available to Medicare beneficiaries in 33 Kentucky counties. The new Baptist Health Plan Select, designed for people who don’t qualify for Medicare and don’t receive coverage through their employer, is being offered in 29 Kentucky counties and is available on kynect, Kentucky’s online health insurance exchange. (Interested parties can also enroll in the program offline.)

The new plans will go into effect in January 2016.

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