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Location Notebook: Kentucky's Favorable Business Climate Brings Record Corporate Investment

Through pro-business initiatives — including cutting red tape, passing RTW legislation, and customizing workforce training — Kentucky captured record investment in 2017 and sees more success ahead.

Q1 2018
A production-line employee at Toyota Motor Manufacturing Kentucky in Georgetown, Ky. helps assemble a Toyota Avalon. The plant – Toyota’s largest globally – began building the all-new 2018 Camry in mid-2017, a signature nameplate it has been manufacturing since opening in 1988. TMMK, which also produces the Lexus ES 350 and hybrid versions of both the Camry and Avalon, employs more than 8,000 team members.
A production-line employee at Toyota Motor Manufacturing Kentucky in Georgetown, Ky. helps assemble a Toyota Avalon. The plant – Toyota’s largest globally – began building the all-new 2018 Camry in mid-2017, a signature nameplate it has been manufacturing since opening in 1988. TMMK, which also produces the Lexus ES 350 and hybrid versions of both the Camry and Avalon, employs more than 8,000 team members.
Editor’s Note: This article was commissioned by the Kentucky Cabinet for Economic Development, which approved and paid for this posting.Kentucky announced $9.2 billion in corporate expansion and new location projects in 2017, representing a commitment of about 17,200 new jobs, the most since 2000. The numbers reflect Kentucky’s economic strengths — top growth sectors include automotive, primary metals, advanced manufacturing, logistics and distribution, and food and beverage.

The state’s 2017 performance broke the previous investment record of $5.1 billion, set in 2015. Billion-dollar-plus projects by Amazon, Toyota, and Braidy Industries led the way in 2017, followed by 330 other significant expansion or location projects, many of them in manufacturing.

Strong Business Climate
Kentucky has long been known for its business advantages, starting with its central location, easy access to nearly two-thirds of the U.S. population, and excellent transportation infrastructure, including interstates, rail, air, and river ports. Recent efforts enhanced Kentucky’s business climate, including through passage of right-to-work legislation, changing the prevailing wage law, and promoting public-private partnerships. In the past year alone, those measures stimulated significant new investment. These attributes, combined with the state’s low business costs, strong and available workforce, and supportive business and incentive programs, make Kentucky one of the top business environments in the country.

“For example, the Governor's Red Tape Reduction program, which has repealed or amended over 1,000 administrative business regulations, and the passage of right-to-work legislation have put us in position to compete for and win projects that we would not have been considered for a couple of years ago,” said Ryan Drane, president of the Graves County Economic Development in West Kentucky. “Combine this with the major business-friendly tax reform the state legislature will introduce in the next few months and it will be clear to companies and site selectors that Kentucky is taking the necessary steps to secure our future for the long-term.”

Another business development asset is the Kentucky Skills Network, which provides no-cost recruitment and job-placement services and reduced-cost customized training and job-training incentives to companies that are locating or expanding. In fiscal year 2017, the Kentucky Skills Network provided training for more than 120,000 workers and 5,700 companies across a variety of industry sectors.

Kentucky’s Economic Development Cabinet also proactively reaches out to other countries to establish trade and economic partnerships. Kentucky representatives made multiple trips to Japan, Canada, and Europe in 2017, recruiting businesses, strengthening relationships, and carrying the message “that Kentucky has earned short-list consideration for corporate-investment projects,” said Vivek Sarin, executive officer for the Economic Development Cabinet. Investment by internationally owned companies totaled $2.47 billion in 2017 across 66 projects, which are expected to create nearly 4,000 new jobs.

And 2018 is taking up where 2017 left off — through February, the state and private companies announced nearly 100 new location or expansion projects. Those represent an investment of nearly $1.2 billion and about 2,000 jobs.

Three Multi-Billion Dollar Projects
Amazon kicked off 2017 with its $1.5 billion, 2,700-job Prime Air shipping hub at the Cincinnati/Northern Kentucky International Airport. Through a partnership with DHL, Amazon Prime Air is ramping up air cargo operations as it plans and starts construction on its 2-million-square-foot facility. When operational, the air hub will reduce Amazon’s dependence on top-tier delivery services, using its own fleet of Amazon cargo planes and trucks instead and partnering with lower-cost regional delivery providers.

The two other billion-dollar-plus announcements were Toyota Motor Manufacturing Kentucky ($1.33 billion) and Braidy Industries ($1.3 billion), which combined represent about 1,800 new jobs. Toyota is modernizing its largest global facility, located in Georgetown, Ky., and increasing its manufacturing flexibility. Already, upgrades paved the way for the plant to launch the 2018 Camry and more vehicles are scheduled to follow. Braidy Industries, which plans to manufacture aluminum sheet and plate for the automotive, aerospace, and defense industries, will construct a 2.5-million-square-foot aluminum mill near Ashland in Northeast Kentucky. Company leaders, citing Kentucky’s passage of right-to-work as a leading factor in their decision, expect the facility to open by 2020 and estimate the project will create about 1,000 construction jobs.

“The state’s willingness to partner closely with private industry makes this a prime location for us to grow our world-class and cutting-edge rolling mill,” said Braidy Industries Chairman and CEO Craig Bouchard.

Kentucky’s 2017 Record Manufacturing Investment

Billion-dollar-plus projects by Amazon, Toyota, and Braidy Industries led the way in 2017, followed by 330 other significant expansion or location projects, many of them in manufacturing.
  1. Amazon

    Hebron, KY

    Amazon kicked off 2017 with its plans for a $1.5 billion, 2-million-square-foot, 2,700-job Prime Air shipping hub at the Cincinnati/Northern Kentucky International Airport.

  2. Toyota Motor Manufacturing Kentucky

    Georgetown, KY

    The Toyota Motor Manufacturing Kentucky ($1.33 billion) and Braidy Industries ($1.3 billion) announcements combined represent about 1,800 new jobs.

  3. Braidy Industries

    Ashland, KY

    Braidy Industries will construct a 2.5-million-square-foot aluminum mill near Ashland in Northeast Kentucky that is expected to open by 2020.

  4. Ford Motor Co

    Louisville, KY

    Ford Motor Co.’s plans to invest $900 million in its Kentucky Truck Plant — one of two Ford plants in Louisville — for production of the aluminum-alloy-bodied Lincoln Navigator and Ford Expedition.

  5. EnerBlu

    Pikeville, KY

    EnerBlu will invest $372 million and create 875 full-time jobs to establish a 1-million-square-foot, high-tech production facility in Pikeville, and invest an additional $40 million and create 110 jobs with the relocation of its headquarters from California to Lexington.

  6. New Flyer

    Shepherdsville, KY

    And Canada-based bus manufacturer New Flyer announced a $40 million, 550-job parts fabrication facility in Shepherdsville, which should be in full operation by the end of 2019.

More Big Announcements
Other major announcements in 2017 included Ford Motor Co.’s plans to invest $900 million in its Kentucky Truck Plant — one of two Ford plants in Louisville — for production of the aluminum-alloy-bodied Lincoln Navigator and Ford Expedition. EnerBlu, which designs and produces battery packs for heavy-duty vehicles, buses, and auxiliary power storage units, will move its headquarters from California to Kentucky and establish a manufacturing plant. And Canada-based bus manufacturer New Flyer announced a $40 million, 550-job parts fabrication facility in Shepherdsville, which should be in full operation by the end of 2019.

“The tax incentives offered by the Kentucky Business Investment Program were an attractive draw for locating our new facility to the state,” said New Flyer Director of Marketing Communications Lindy Norris. “Our location in the Bullitt County area is also within a hub of large, sophisticated businesses such as Amazon and Best Buy, so we know the economic development groups there understand complex, fast-paced organizations. This area also offered the depth of talent we need, including for future growth possibilities.”

EnerBlu is a big win for Eastern Kentucky. The company will invest $372 million and create 875 full-time jobs to establish a production facility in Pikeville, and an additional $40 million and 110 jobs with the relocation of its headquarters to Lexington. The 1-million-square-foot, high-tech facility in Pikeville will manufacture lithium-titanate (LTO) batteries for transit buses, commercial trucks, military vehicles, and other equipment. In Lexington, the company will create 110 executive, administrative, and R&D positions.

In particular, EnerBlu executives came away impressed with the state’s logistical advantages and the availability of a trained workforce. “This area’s highly skilled workforce has a strong understanding of direct-current power, complex machinery, and robotics operations in production environments,” said Daniel Elliott, president and CEO of EnerBlu.
With a nearly $1.5 billion investment announced in January 2017, Amazon is building its first-ever Prime Air shipping hub at the Cincinnati/Northern Kentucky International Airport. The project is expected to create 2,700 full- and part-time jobs in the near term as well as attract other businesses to the region.
With a nearly $1.5 billion investment announced in January 2017, Amazon is building its first-ever Prime Air shipping hub at the Cincinnati/Northern Kentucky International Airport. The project is expected to create 2,700 full- and part-time jobs in the near term as well as attract other businesses to the region.
More Investments to Come
Kentucky’s record-setting corporate investment and jobs performance in 2017 and its solid start in 2018 are the result of the state’s pro-business legislation and policies, including passing right-to-work legislation, red-tape reduction, and other pro-business measures as well as its existing infrastructure, business community, and geographical advantages.

Economic development officials cited workforce-training programs announced across the past couple years as emerging drivers of corporate investment for the coming years. New programs and legislation are focusing on scholarships, apprenticeships, corporate- and community-backed training, and other means to ensure companies operating in Kentucky can hire the skilled employees they need now and in the long term.

As well, state leaders continue to work with regional and local governments and organizations to create new partnerships and economic development opportunities. Partners include communities, utility providers, educational institutions, private-sector employers, associations, and other entities.

“The remarkable results in 2017 prove the effectiveness of these efforts, as well as the many changes, initiatives, and programs at the state, regional, and local levels,” Sarin said. “Going forward, more companies and site selectors will recognize the benefits of our community development, workforce training, and additional business-climate improvement measures.”
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