With Kentucky being one of the United States’ top producers of cars and light trucks, we talk a lot about the impact of our four major manufacturing plants, not just on their local communities but also on parts manufacturers and suppliers around the state.
During an event touting the Ford Motor Co.’s new investment in Louisville on Thursday, I heard a number that puts that spin-off in perspective.
That’s the value of parts and other goods that Ford will buy this year from more than 180 suppliers in Kentucky (actually, Ford Vice President John Fleming said “more than $3.8 billion”).
That’s a lot of parts, creating economic impact throughout the state.
That’s one of the many reasons I have been so thrilled by Ford’s ongoing investment in its Louisville Assembly Plant and its Kentucky Truck Plant in Jefferson County.
If you recall, with the car industry facing huge challenges during the recession, the future of those plants was in doubt. But I as governor and then-Louisville Mayor Jerry Abramson put in long hours on the phone and even flying to Michigan to convince Ford to stay in Louisville and Kentucky.
The company’s decision in 2008 to retool the plants saved about 5,000 jobs.
Ford strengthened its commitment last year when it announced it would invest $600 million to retool LAP to build the next-generation Ford Escape, and add in the process add 1,800 workers.
On Thursday, Ford executives came in to see those changes and to confirm additional news: a planned $621 million investment in the truck plant over the next four years, and the likely addition of a third shift toward the end of next year at LAP, totaling about 1,300 new workers.
In one year, that’s more than $1.2 billion in new investment, and 3,100 new jobs.
I am proud of the efforts of myself and others – including former Mayor Abramson and Sec. Larry Hayes and other members of the state Cabinet for Economic Development – to work with Ford to negotiate the investments and to set up incentives to help make the expansions successful.
I also want to acknowledge the efforts of UAW leaders and members who worked with Ford management to write and approve a new contract.
As a result, our economy benefits, the community benefits, the company benefits and our families benefit.
More than 90 percent of Kentucky businesses have fewer than 50 employees, so when we talk about job creation and growing the economy – especially cutting-edge, high-tech jobs – many times we’re talking about small businesses.
Unfortunately, many small businesses can’t obtain the capital to put creative ideas into action.
They’re credit-worthy. But in this era of caution, many lie just outside of the guidelines of private sector lenders.
This week, however, we announced a major new initiative that will give Kentucky entrepreneurs and small businesses access to nearly $155 million to help with job creation across this state.
The Kentucky Small Business Credit Initiative includes three new programs to be used by the Cabinet for Economic Development to facilitate private lending to small businesses.
• The Kentucky Capital Access Program will encourage private lenders to be more aggressive in loan practices by offering them additional insurance against potential loss.
• The Kentucky Collateral Support Program will help borrowers whose cash flow does not meet lenders’ requirements.
• And the Kentucky Loan Participation Program will enhance a lender’s ability to underwrite a loan.
The increased access to capital was made possible by the Small Business Jobs Act of 2010.
Kentucky successfully applied for just under $15.5 million from the U.S. Department of Treasury, and that money will be leveraged 10-1 with private lender funds to generate almost $155 million.
The program continues our aggressive outreach to small businesses with programs and services designed to help them in this difficult economy. These include:
• Creating the Kentucky Small Business Investment Credit.
• Expanding the Kentucky Micro Enterprise Loan Program.
• Creating the Governor’s Export Initiative to foster international trade relationships.
• Developing a One-Stop Business Portal to streamline interaction with state agencies.
• And using state money to match dollar for dollar the grants issued through two federal programs that nurture technology and innovation at our small businesses. v
We’re the only state that does this, and we just completed our 11th round of funding, matching 112 grants to 56 companies.
• We’ve also held numerous forums and seminars focusing on helping people start new businesses. And last year we responded to over 5,000 inquiries from entrepreneurs requesting help with starting or expanding a business.
The Corvette is a car that – quite simply – people dream of owning.
With a baseline 430 horsepower and breath-taking curves, the Corvette’s combination of power and beauty have won a cult following worldwide.
But in Kentucky, where this icon has been manufactured exclusively since 1981, we also love the Corvette for another reason: JOBS.
The General Motors (GM) facility in Bowling Green – with nearly 500 employees – has long been an integral part of an automobile industry that helps drive the Kentucky economy.
Last week I met with senior GM executives in Detroit to discuss the possibility of the investment I was excited to announce at the Bowling Green plant earlier today:
Beginning this spring, GM plans to invest more than $131 million to refurbish the BG facility, creating 250 NEW JOBS as it adds a vehicle product program – the next-generation Chevy Corvette.
The car is expected to hit dealer showrooms in mid-2013, and I’m sure drivers across the world can’t wait.
I know I can’t.
I want to commend GM officials for this investment and their confidence in this region’s workforce, which is one of the strongest in the state.
We are also proud to help make this investment happen with performance-based tax incentives through the Kentucky Business Investment program.
In Warren County alone, KBI incentives have been approved for more than a dozen projects representing nearly 850 jobs created or saved.
KBI has improved our ability to work with existing Kentucky companies like GM –because they are the key to turning this economy around.
We continue to focus on our economic strengths, such as the automotive industry.
After all, only Michigan and Ohio manufacture more cars and light trucks than Kentucky, but we’re catching up.
Today’s announcement is indication of Kentucky’s car industry growth and success—and what better way to lead the charge, than with a Corvette?
Last October I traveled to India as part of a strategic effort to increase trade and investment opportunities between Kentucky and one of the world’s fastest-growing economies.
I was the first sitting Kentucky governor to do so – and I had a clear agenda.
On a general level, I wanted to send a message to the world that Kentucky was open for business. But I also had a very specific goal: To begin building a strong and mutually beneficial partnership with the government and business community in India, much as Kentucky has done with Japan over the last few decades.
My trip sparked a lot of interest, both here in the Bluegrass State and throughout India.
And it caught the attention of a very successful company in India that is rapidly growing around the world.
That company visited Kentucky in January, beginning several months of talks, site visits and negotiations. As a result, Kentucky pulled ahead of at least five other states being considered by the company, and this past weekend, I traveled to India to solidify the deal.
On Wednesday, those discussions culminated in an exciting announcement: New Delhi-based UFLEX Ltd., a global leader in the flexible packaging industry, is locating its first U.S. manufacturing plant in Elizabethtown.
The project will occur in phases: Initially the company will make a $90 million investment that will create 125 new jobs. That phase will be finished by the end of 2012. But ultimately those numbers will double, for a total investment of at least $180 million and 250 jobs. And that, we hope, is only the beginning of the UFLEX-Kentucky story.
Those are big numbers that represent a tangible step forward for the company, for this region, and for the developing partnership between Kentucky and India.
This is the first so-called “green field” project for a company from India, meaning the first facility built in Kentucky (and we believe the United States) from scratch.
Established in 1983, UFLEX makes a very wide variety of products for the packaging industry.
It operates state-of-the-art manufacturing facilities in India, Dubai, Mexico and Egypt and is setting up one in Poland. It has offices all over the world with a market presence in 110 countries.
At the state level, we’re thrilled to be able to partner with the company to help make this happen.
On Wednesday, the Kentucky Economic Development Finance Authority called a special board meeting to give preliminary approval for performance-based tax incentives for UFLEX through the Kentucky Business Investment program.
This project is yet another example of the success of the KBI program, which was created by the overhaul of our economic development tools in summer 2009.
It also demonstrates the value of our steadfast efforts to promote economic development opportunities on a global scale. India is one of the largest and fastest-growing economies in the world and represents unlimited potential for cultivating job and investment growth.
It reminds me of my days as lieutenant governor in the mid-1980s, when Kentucky had less than a handful of Japanese-owned companies.
But then-Gov. Martha Layne Collins had a vision that began with aggressive efforts to recruit Toyota Motor Manufacturing to Georgetown.
That goal paid off, and today Kentucky has nearly 150 Japanese-owned companies employing more than 32,000 people across the state, a significant and critical part of our economy.
I have the same vision for India, and the project in Elizabethtown is a great start on making it a reality.
Kentucky businesses – especially small businesses – will get a boost from two initiatives we announced this week.
One will help them export their goods overseas. The other is a tax credit for those businesses wanting to expand.
The Kentucky Export Initiative will bring together Kentucky’s leading international trade organizations to educate qualified small and medium-sized businesses about the impact of exporting … provide companies with information on new markets … identify potential distributors, agents and end-users … and assist with compliance, logistics and legal questions.
The program will start in January in Kentucky’s 54 Appalachian counties, thanks to an $85,000 grant from the Appalachian Regional Commission.
The program will continue the momentum that has helped Kentucky’s exports increase by 83.6 percent between 2000 and 2009. Last year alone, Kentucky exports contributed about $3.7 billion to our direct state gross domestic product … and created 41,000 direct jobs.
That’s in the middle of a recession, remember.
Numbers like these are why Kentucky ranks 6th in the nation in exports per capita. For a small, non-border, non-coastal state, this is a huge achievement.
What makes these figures even more impressive is that over 90 percent of Kentucky’s exporters are small and medium-sized businesses, most of which employ fewer than 20 people.
That’s why the second initiative – the Kentucky Small Business Investment Credit Program – is so timely.
Geared toward businesses with fewer than 50 employees, the Small Business program is part of Incentives for a New Kentucky (INK), the new package of economic development tools we created last year.
It will provide state income tax credits ranging from $3,500 to $25,000 to businesses that create, fill and maintain one or more new, eligible jobs while investing at least $5,000 in qualifying equipment or technology.
Formal applications will be accepted come January. The good news is that the program is retroactive – hires and purchases dating back to January 1, 2010, will count.
We’ve set aside $3 million a year for the program, and already there’s great interest.
In the 16 months since INK was approved, by the way, 229 projects have received preliminary approval for one or more of its programs. Some 224 of those are considered “active,” and they represent a potential investment of more than $2.1 billion and could create just over 13,000 jobs , while helping to retain an additional 4,820 existing Kentucky jobs.
Helping our businesses create and retain jobs is the key to turning this economy around.
Our aggressive effort to energize Kentucky’s economy surpassed a significant milestone on Thursday – the 200th jobs project approved under a new approach to business partnerships.
In fact, 211 projects have received preliminary approval, with 206 of them either moving forward or still considering an investment in Kentucky.
Collectively, these active projects represent a potential investment of more than $1.8 billion across the Commonwealth and could create 11,466 jobs, while helping to retain an additional 4,820 existing Kentucky jobs.
It’s all part of what we call INK, or Incentives for a New Kentucky.
Shortly after I took office I became aware that the proverbial toolbox Kentucky used to attract and retain businesses needed serious attention.
Our once innovative economic tools had grown rusty and dull. Many were missing parts, and some were outdated.
Essentially, we were using hand tools in a power tool world.
So in January 2009 I proposed an overhaul of our economic development initiatives to strengthen our attractiveness and to improve our ability to nurture our existing businesses.
Later that year, the General Assembly approved that overhaul.
Since then we have been using the various programs to attract new businesses, help existing Kentucky businesses expand their workforces and help other Kentucky businesses retain jobs by improving their competitive abilities.
Project locations have ranged from Greenup and Letcher counties in the east to Barren and Warren counties in south-central Kentucky to Calloway and Graves in far western Kentucky to the Golden Triangle.
The latest project approvals came Thursday at the October board meeting of the Kentucky Economic Development Finance Authority.
We expect even more success at the joint November-December meeting.
The number of companies approved in the 16 months since INK was implemented is nearly 60 percent higher than the number approved in the same period before the overhaul.
Clearly, we’re on the right track. Clearly, these new programs are effective.
But we’re not surprised. Kentucky economic development officials worked with legislators to craft the incentives bill after obtaining the input of local economic development officials, corporate site selection consultants and extensively researching other states.
It’s further proof that we will not hunker down and hide during this tough economic time, relying on hope that things will get better.
We will make them better.
After seven days of intense economic development work in India, I’m back in Kentucky, tired but optimistic those efforts will pay off.
In fact, I feel confident that we will be in a position to announce new jobs and investment for Kentucky in the next several months as a result of this trip.
As I wrote the other day, I became the first sitting Kentucky governor to travel to India as part of a strategic effort to increase both trade and investment opportunities between Kentucky and one of the world’s fastest-growing economies.
As governor, it is my goal to strengthen our ties with the world and to send a clear message that Kentucky is open for business.
With the help of Economic Development Secretary Larry Hayes and one of Kentucky’s most enthusiastic ambassadors, First Lady Jane Beshear, accompanying me, I was able to do that.
We were invited to India by NASSCOM, the premier trade body and the chamber of commerce of the information technology industries in India. NASSCOM, which facilitates business and trade in software and services and encourages advancement of research in software technology, also paid for Larry’s, Jane’s and my travel expenses.
While in New Delhi and Mumbai, we met with key government officials and business organizations, as well as several companies that have or are considering future investments in the United States, including Chandra Proteco and Mahindra & Mahindra Ltd.
Chandra Proteco, of course, is the company that recently located its Kentucky Copper facility in Morgantown, creating more than 100 jobs and investing more than $30 million.
It makes high-tech copper cables used in power distribution and transmission.
While in Mumbai, I joined company officials in Silvassa in inaugurating their state-of-the-art facility, a visit that was praised in India’s press by Mukul Gupta, group president of the company, as a hopeful sign of great things to come.
Just as we’ve learned with Japanese-based companies and officials, it’s through such relationships that long-lasting ties are built.
This visit was just the beginning of what can and will be a strong and ongoing partnership with India.
And it’s an example of the aggressive kind of work we must do in tough economic times like these to build a foundation for a successful future.
When I was lieutenant governor in the mid-1980s, Kentucky had less than a handful of Japanese-owned companies.
But then-Gov. Martha Layne Collins had a vision that began with aggressive efforts to recruit Toyota Motor Manufacturing to Georgetown.
That goal paid off, and today Kentucky has nearly 150 Japanese-owned companies employing nearly 33,000 people across the state, a significant and critical part of our economy.
I have the same vision for India.
That’s why I left today for a seven-day economic development mission that represents the first-ever trip to India by a sitting Kentucky governor. This is a strategic effort to increase both trade and investment opportunities between Kentucky and one of the world’s fastest-growing economies.
I will be accompanied by First Lady Jane Beshear, who is one of the state’s best ambassadors, and Economic Development Secretary Larry Hayes.
The trip is carefully scheduled to showcase the unlimited opportunities Kentucky offers to Indian investors and to connect with key Indian and U.S. business organizations.
Among those we will be meeting in New Delhi and Mumbai are:
- Key government officials, including former India President Dr. A.P.J. Abdul Kalam.
- Major business organizations, including the Federation of Indian Chambers of Commerce and Industry (FICCI) and the National Association of Software and Service Companies (NASSCOM).
- Officals from Chandra Proteco, an India-based company that recently located its Kentucky Copper facility in Morgantown, Ky.
- Companies actively considering future investments in the United States.
I was invited to India by NASSCOM, the premier trade body and the chamber of commerce of the information technology industries in India, and the organization is sponsoring the trip.
Currently six Indian-owned companies operate in Kentucky, employing more than 1,500 people. These operations entail a $148 million investment in the Commonwealth.
But there is room for significant growth. Between 2004 and 2009, Kentucky’s exports to India grew more than 252 percent to $96.5 million.
This trip will continue that momentum by opening the door to future collaborations between Kentucky and India.
We cannot hunker down and hide during this difficult economic time.
We must aggressively push forward and seek opportunities for new relationships and growth.
Last week was incredibly busy, full of diverse announcements and events, so let me catch up:
On Monday, in addition to announcing the median barriers on I-65 in the Hart County-LaRue County area, I traveled to Louisville to see a house whose energy consumption and costs are being dramatically reduced through the Kentucky Weatherization Assistance Program.
It was an impressive display of what can be done.
While there, I announced that the federal government – recognizing Kentucky’s success with the weatherization program – is releasing the remaining half of the $70 million we were awarded last year from the American Recovery and Reinvestment Act.
We plan to improve 8,752 homes with that money, and already more than 2,600 are finished.
In the process, we’re helping low-income families in this difficult economic time, we’re creating jobs, we’re saving the environment by cutting energy use and we’re helping a Kentucky company, since we’ve signed a contract with GE to supply its new ultra energy-efficient water heater, made in Louisville.
On Wednesday, I traveled to Elizabethtown for yet another significant step forward in the realignment of the Fort Knox military installation.
In addition to creating thousands of jobs, the U.S. Army’s transformation of Fort Knox is bringing 13,000 people to the region – not just Army administrators and servicemen and women but also civilian contractors and of course family members for all workers.
Since 2005 the state has been working feverishly with base and local officials to improve schools, roads and other infrastructure serving those families.
Wednesday I delivered two checks totaling about $151 million.
A little over $112 million will fund four road projects designed to alleviate congestion on U.S. 31W, on which the morning commute time from Elizabethtown to Fort Knox has more than doubled.
The other $38.5 million will fund 11 projects designed to expand the capacity of the water and sewer service in the region.
The money was authorized by the General Assembly earlier this year at my request.
To me, the support of BRAC is both an opportunity and an obligation -- by taking advantage of this incredible potential for growth, Kentucky can support the mission of U.S. military installations.
On Thursday I began the day speaking – as is tradition – at the Kentucky Country Ham Breakfast, which is part of the Kentucky State Fair.
There I gave what some people call the State of the Commonwealth for Agriculture.
I promised farmers and other agriculture officials that I would continue to do two things: Stick up for them during this horrible economy time, and act aggressively to make sure that farming remains an integral part of Kentucky’s future.
I reviewed an array of my initiatives and goals: preserving 50 percent of Master (Tobacco) Settlement Funds for farming-related investments … adding to the $71 million in Agricultural Development Funds we’ve invested ($50 million on direct farmer cost-share incentives, $21 million on projects ranging from farmers’ markets to renewable fuel production) … various agri-energy conservation and production initiatives, including biomass projects … veterinary loan programs … the Kentucky Proud marketing initiative .. and the Kentucky Equine Health and Welfare Council.
Then I closed with a warning and a vow: We’ve heard a lot of political talk recently about the need to eliminate programs that provide a safety net for farmers and that help us maintain and modernize this nation’s food supply.
Some people apparently think we should abandon farmers. I strongly disagree with those sentiments. This is a farm state. And as long as I am governor, we will stand up for our farm families.
Now, later Thursday, back in Frankfort, I signed a proclamation for Women’s Equality Day that marked the 90th anniversary of the signing of the 19th Amendment to the U.S. Constitution, which finally gave women the right to vote.
Having the opportunity at various stages of my career to work alongside leaders like former Gov. Martha Layne Collins, Auditor Crit Luallen, budget director and Executive Cabinet Secretary Mary Lassiter, and former state Sen. Georgia Powers, it’s stunning to me that society once shunned the skills, talents and ideas of such people – just because they were women.
I used the occasion to announce the Commission on Women’s 10-year Kentucky Women’s History Project.
It has three parts: A consortium that will assemble a complete and seamless account of the contributions of women to the growth and development of Kentucky from the Suffrage movement to the 21st Century … a historical poster series that will create materials to help schools teach women’s history … and the beginning of the discussion to erect two prominent statues of women in the State Capitol building.
As you know, the building currently has no statues of women, so this idea is long overdue. It’s a massive undertaking that may take the entire 10 years to complete, but the time to start is now.
Friday, I traveled to the Lexington Arboretum to honor the fourth anniversary of the crash of Flight 5191, which killed 49 people.
The ceremony was a somber one. Many people there lost family in the tragedy. Jane and I lost several friends.
But it was also a hopeful day, because we broke ground for a memorial.
Sculptor Douwe Blumberg’s design -- 49 metal birds rising from the ground like souls floating into the heavens – is a gorgeous one, and the Flight 5191 Memorial Remembrance Committee has done a fabulous job under difficult circumstances.
To help, we committed $100,000 in state aviation funds toward the memorial’s construction.
I look forward to the completion of this site, which will give all Kentuckians an opportunity to pay their respects and reflect on 49 lives lost too soon.
A final note: Jane and I were saddened by the death of Bob Sexton on Thursday night.
I have known Bob for years, and working with him on the Prichard Committee for Academic Excellence gave me the opportunity to see firsthand how deeply he valued Kentucky and how committed he was to improving education for all our students. His passing leaves an enormous void in our state.
Many Kentuckians may not realize the revolutionary impact Bob had on shaping our state's education practices. The most fitting memorial will be for us to continue his work and continue to improve our schools.
NASCAR’S Sprint Cup Series is coming to Kentucky.
Today I joined Kentucky Speedway owner Bruton Smith and others for an announcement that racing fans have been awaiting for a long time: The track in Gallatin County will host its inaugural 400-mile Sprint Cup Series race on July 9, 2011.
That’s less than a year away.
The Kentucky Speedway is the first facility to be added to the 36-race tour since 2001, so this is a big accomplishment.
I want to congratulate Bruton Smith, who is chairman and CEO of Speedway Motorsports Inc., for getting the job done. He promised a race, and he delivered.
If you’ve ever been to the Kentucky Speedway, then you know what a thrill it is to see cars barreling side-by-side-by-side down the backstretch. In one 2004 race, the margin of victory was 14 one-thousandths of a second.
That’s pretty intense racing. With today’s announcement, it’s about to get even better.
But then we’re used to world-class sports action.
Kentucky, after all, has long been home to college basketball championships … the Kentucky Derby … the World Equestrian Games … the Ryder Cup … and, just down the road in Owen County, the U.S. Open Sporting Clay Championships.
You might say that horses, hoops, shooting, golf and racing are the five pillars of entertainment in the Bluegrass State.
In addition to the entertainment value of a Sprint Cup Series race is a hefty economic impact, which has been estimated at up to $150 million.
My administration has worked aggressively over the last couple of years to pave the way for the expansion needed to accommodate the race.
In February 2009 I called a press conference to voice the need for an amendment to the Kentucky Tourism Development Act to help the Speedway and the state take advantage of this economic opportunity. The Kentucky Speedway had been among the first projects approved under the original Tourism Development Act, which provides tax incentives to new or expanding businesses.
The amendment would create a new eligible category of so-called “legacy expansion” projects, designed to support developers willing to invest millions in expanding large-scale facilities and events.
The legislation didn’t survive the regular session, but I was able to bring the General Assembly together in a special session last summer to get the job done. I then signed that legislation, without which today’s announcement would not have happened.
It just proves that when you work together, good things happen.