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Kentucky: Future Bets Include Alternative Energy and Revamped Auto Manufacturing

Aug/Sep 09
Kentucky's large automotive sector - which includes Ford, General Motors, Toyota, and upwards of 400 auto industry suppliers - is steering the state around the nation's economic speed bumps. Larry Hayes, Acting Secretary for Economic Development, says that the Bluegrass State's future development plans combine production of current models with strategies for the car of the future, with an emphasis on clean energy sources provided by battery technology. A new national Battery Manufacturing Research and Development Center is in the works in Lexington, funded by the Commonwealth of Kentucky, the University of Kentucky, the University of Louisville and the Argonne National Laboratory.

General Electric (GE) is also is expanding in an energy-saving direction, with 400 new jobs in Louisville expected from the planned manufacturing of an environmentally friendly water heater (pictured, above); production is expected by 2011. "We chose Kentucky for the manufacturing of GE's new hybrid electric water heater for a variety of reasons," says Kim Freeman, public relations manager for GE Consumer and Industrial.

"We currently have a manufacturing facility in Kentucky, and the current work force is well trained and well qualified. In addition, Kentucky provided worker training assistance that will help us hire and train additional workers to make the product. Also, Kentucky and Louisville offered us a package of financial incentives that made it attractive to GE to manufacture the hybrid electric water heater in Kentucky."

Northern Kentucky is home to more than 500 manufacturers in diverse sectors such as aerospace, machine tool, automotive, plastics, and the food industry. Dan Tobergte, president and CEO of Northern Kentucky Tri-County Economic Development Corporation (Tri-ED), says the region is strategically focused on attracting advanced manufacturing, technology and life sciences, professional office, and aviation companies "Our efforts have been highly successful, with companies like Toyota's North American Headquarters for Engineering & Manufacturing in Erlanger, Fidelity Investments choosing Covington for its Midwest campus, Lafarge's largest drywall plant in the world in Campbell County, and Perot Systems housing a data center in Florence."

Also in that part of the state, BlueStar, an international distributor of point-of-sale, RFID and automatic identification devices, relocated its global headquarters of to a 150,000-square-foot facility in Hebron. "Northern Kentucky is centrally located for our distribution and travel needs," says Mark Fraker, the company's vice president of marketing. "The work force here is well educated and trained and Northern Kentucky is a very affordable place to do business." Hebron will also see new investment from Andrews Electronics, a provider of consumer electronic parts distribution and reverse logistics, which earlier this year announced a 73,500-square-foot operation.

Kentucky legislators have also reacted to the need to provide incentives for companies that may explore other states for better deals. Hayes says that the state legislature recently updated economic incentive programs to give greater flexibility to work with the existing manufacturing base. "Some of our greatest assets are in our existing industries," he says. To help the state stay competitive and prevent relocations to other states, one part of the legislation amends the Kentucky Reinvestment Act to assist existing manufacturers making significant capital investments to retool their Kentucky facilities.

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