Job Creation

Lenovo To Open U.S. PC Manufacturing Plant in Whitsett, NC

Lenovo, the world’s second-largest personal computer vendor, announced that it has chosen Whitsett, North Carolina as the site for its U.S. manufacturing plant.

NC Gov. Bev Perdue and other local and state officials join Lenovo executives for U.S. plant announcement

NC Gov. Bev Perdue and other local and state officials join Lenovo executives for U.S. plant announcement (Photo – blog.lenovo.com)

The new Lenovo plant near Greensboro will create 115 new manufacturing jobs, with workers building the company’s Think-branded notebooks and desktop PCs for sale to domestic businesses, government agencies, education institutions, as well as ordinary consumers.

“Lenovo’s decision to create electronic manufacturing jobs in North Carolina is a tremendous vote of confidence in the great skills and productivity of our state’s workforce,” said NC Gov. Bev Perdue. “We have a strong track record of commitments to education, training and economic policies that promote growth in our state’s manufacturing sector. This decision by Lenovo clearly demonstrates that North Carolina is an attractive place where leading global businesses can thrive.”

The manufacturing is already under construction and will be operational by 2013. It is being built within Lenovo’s newly expanded 240,000 sq ft U.S. distribution center in Whitsett. Hiring for the manufacturing and related positions will begin later this year.

Lenovo said in a statement that it believes having a manufacturing component in the U.S. can provide the capability to deliver products to customers more quickly and reliably in many situations, while offering an even broader and more valuable set of PC-related services.

“Lenovo is establishing a U.S. manufacturing base because we believe in the long-term strength of the American PC market and our own growth opportunities here,” said Yuanqing Yang, chairman and CEO, Lenovo. “As Lenovo expands globally, we are establishing even deeper roots in each major market. In addition to localized sales and marketing teams, in our major countries we are establishing an even stronger manufacturing footprint, investing in R&D and ensuring that we hire top local talent.”

“Adding this manufacturing capability in the U.S. is a unique operational approach that sets us apart from our competitors,” said David Schmoock, president of Lenovo North America. “At Lenovo, we aim to innovate and pioneer, whether it’s the products we offer or finding new ways to engage customers by transforming the operations that support them.”

Their global approach is the result of the way the company as it is today was created. The Lenovo Group was founded in Beijing, China in 1984 and acquired the IBM personal computing division in 2005. Today, Lenovo is co-headquartered in Beijing, Singapore and Morrisville, North Carolina.

Lenovo is the world’s second largest PC vendor after Hewlett-Packard. Lenovo generated 2012 revenues of $29.57 billion which resulted in net earnings of nearly $473 million. The company was 27,000 employees in divisions spread all over the world.

Drive Automotive to Invest $50M in Piedmont, SC

The South Carolina Department of Commerce announced that Magna Drive Automotive swill expand its existing Greenville County facility in Piedmont, SC with a $50 million investment that is expected to generate 60 new jobs.

Magna Drive Automotive

Magna Drive Automotive (Photo – magna.com)

Magna Drive Automotive manufactures automotive body panels and assembles body systems using state-of-the-art equipment such as multi-ton hydraulic presses and advanced robotic systems.

“We celebrate Drive Automotive’s decision to invest $50 million and create 60 new jobs. South Carolina continues to show that it is the right place to do business,” said SC Gov. Nikki Haley. “Announcements like this one show we are doing the right things to help companies prosper and grow.”

The expansion will add approximately 150,000 square feet to the size of the existing facility to support a growing customer base among the major automotive and heavy truck manufacturers.

Drive Automotive began production at its Greenville facility in 1994.

“Drive Automotive is a good example of a good quality employer with innovative business practices that fits nicely into our local economy,” said H.G. “Butch” Kirven, director of the Greenville Area Development Corporation and chairman of Greenville County Council. “We are very pleased that Drive Automotive has selected Greenville for this important new investment and business expansion.”

“Drive Automotive’s expansion is a vote of confidence in the competitiveness, quality and depth of the Upstate’s workforce when it comes to world-class manufacturing,” said Hal Johnson, president and CEO of the Upstate SC Alliance.

It was not immediately revealed what kind of incentives package South Carolina has offered to Drive Automotive.

Craig Lane, general manager of Drive Automotive, had this to say Р“Given the competitive nature of obtaining funding for projects, we at the Drive facility are very appreciative of the support of Greenville County Council and the Governor’s Office. We truly believe it is a win for everyone.”

The Piedmont, SC-based Magna Drive Automotive (formerly Drive Automotive Industries of America) is a manufacturing division of Cosma International, which is in turn an operating unit of Magna International Inc.

The expansion work at the Moon Acres plant in Piedmont is expected to be complete by the third quarter of 2013. Drive Automotive will begin hiring for the 60 new positions in 2014.

World Bank Report Says 600M Jobs Needed in 15 Years

The World Bank has published its World Development Report 2013 on Jobs, and the report’s grim prognosis is that the world needs to urgently create 600 million new jobs in the next 15 years.

World Bank jobs

Photo – worldbank.org

Even if this target is reached, it will only keep the current unemployment rate from rising, and will not bring it down.

‚ÄúA good job can change a person‚Äôs life, and the right jobs can transform entire societies. Governments need to move jobs to center stage to promote prosperity and fight poverty,‚Äù said World Bank Group president Jim Yong Kim. “It’s critical that governments work well with the private sector, which accounts for 90 percent of all jobs. Therefore, we need to find the best ways to help small firms and farms grow. Jobs equal hope. Jobs equal peace. Jobs can make fragile countries become stable.”

The report’s authors highlight how jobs with the greatest development payoffs are those that raise incomes, make cities function better, connect the economy to global markets, protect the environment, and give people a stake in their societies.

“Jobs are the best insurance against poverty and vulnerability,” says Kaushik Basu, World Bank chief economist and senior vice president, “Governments play a vital enabling role by creating a business environment that enhances the demand for labor.”

The WDR authors pored over 800 surveys and censuses to arrive at their findings. They estimate that worldwide, more than 3 billion people are working. But the problem is that nearly half work in farming, small household enterprises, or in casual or seasonal day labor, where safety nets are modest or sometimes non-existent and earnings are often meager.

“The youth challenge alone is staggering. More than 620 million young people are neither working nor studying,” says WDR director Martin Rama. “Just to keep employment rates constant, the worldwide number of jobs will have to increase by around 600 million over a 15-year period.”

The Report suggests a three-stage approach to help governments meet these objectives:

  1. Solid fundamentals including macroeconomic stability, an enabling business environment, human capital, and the rule of law have to be in place.
  2. Labor policies should not become an obstacle to job creation, they should also provide access to voice and social protection to the most vulnerable.
  3. Governments should identify which jobs would do the most for development given their specific country context, and remove or offset obstacles to private sector creation of such jobs.

Guy Ryder, the new Director-General of the United Nations International Labour Organization (ILO), has called for programs that specifically target getting young people into jobs.

“All of the evidence shows that if a young person is out of work for a year or more at the beginning of their career, that affects them throughout their working life,” said Mr. Ryder. “There’s no way back for most of them. So we have to act urgently, we have to act now and we have to target young people.”

Mr. Ryder said the ILO intended to make youth employment “one of the priorities” in the coming months, with a specific focus on programs that offered youth training or work experience.

“Sounds expensive? It’s affordable,” said Mr. Ryder. “It’s an investment, not a cost.”

Read the full World Development Report 2013 on Jobs – Download (pdf)

Brand USA Marketing Campaign Helps Grow Tourism Jobs

Until recently, the United States was one of the few major destinations in the world which did not have a national tourism organization working to attract international visitors. That changed when the public-private Corporation for Travel Promotion (CTP) was created under the Travel Promotion Act of 2010 and began doing business as Brand USA.

Brand USA

Brand USA (photo – welcometousa.gov)

All that effort and legislation is now paying off in the form of more tourism jobs created due to increased interest in the U.S., thanks to the country’s first-ever international tourism marketing campaign.

“Travel and tourism is the United States’ largest services export and huge job creator,” said Caroline Beteta, Brand USA’s interim CEO and incoming chair of the organization’s board of directors. “Brand USA is actively engaged with our federal agencies in a coordinated effort to grow our economy through boosting tourism to all parts of the United States, and we are pleased with the progress to date.”

According to a report issued by the Department of Commerce’s Office of Travel and Tourism Industries (OTTI), international visitors have spent an estimated $82.2 billion on U.S. travel and tourism-related goods and services from the start of the year to Aug 21, 2012.

This is an increase of 11 percent over the same period in 2010. By year end 2012, the OTTI report estimates that international visitors could end up injecting a record $169 billion into the U.S. economy.

Intent to visit has increased significantly in Brand USA’s consumer launch markets within just three months since the campaign launched in May Рup 13 points in Canada, 17 points in the UK and 11 points in Japan.

In Japan, 70 percent of survey respondents said that the Brand USA campaign “makes me somewhat or much more interest in traveling to the United States.” In addition, an increasing number of potential travelers from Japan now found the United States “adventurous,” “energetic,” and “optimistic, as well as “a place where you always feel welcome.”

In Canada, 82 percent of survey respondents said they would consider visiting more U.S. destinations as a result of the campaign and the market effort strengthened the perception that the U.S. is “a place to indulge myself” and 75 percent found it to be a “place to relax.”

In the United Kingdom, 61% of survey respondents since the campaign launch described the United States as “worth paying more for than other travel destinations”, as well as increasingly “energetic,” “optimistic,” and “a place with limitless possibilities” which “has something for everyone.”

In 2011, direct traveler spending was $813 billion, which supported 7.5 million American jobs. If you factor in indirect spending, the total works out to $1.9 trillion, which supports 14.4 million American jobs – one in every eight.

A U.S. Travel Association report (pdf) explains why economic development agencies should focus on travel and tourism as opposed to manufacturing or high-tech projects – “Comparing the overall employment impact of the operations of four different investment projects shows that while all new business investments provide positive economic benefits to local communities, other industries do not possess the same ripple effect as travel. Assuming each new facility employs the same number of direct workers (500), a 2011 study found that an investment in a travel business (hotel or attraction) supports more total jobs than a manufacturing or a data processing facility.”

Find out more about how the United States is being marketed to international travelers at thebrandusa.com and discoveramerica.com.

ExxonMobil Announces $215M Expansion in Port Allen, Louisiana

Exxon Mobil Corporation announced that it will be making a $215 million capital investment to expand operations, revive and modernize equipment and construct a state-of-the-art blending center for synthetic aviation oil in Port Allen, Louisiana.

ExxonMobil plant in Port Allen, La.

ExxonMobil plant in Port Allen, La. (Photo – ExxonMobil)

The expansion will create 45 direct jobs, with an average annual salary of $66,200, plus benefits.

Louisiana Economic Development (LED) estimates the manufacturing project also will result in 389 new indirect jobs in the Capital Region, while retaining 2,607 existing jobs associated with the ExxonMobil Chemical Plant and Lubricants Plant operations in the region.

‚ÄúWe’re proud that ExxonMobil chose to expand right here in our state because of our world-class energy infrastructure, strong business climate, and incomparable workforce,‚Äù said La. Gov. Bobby Jindal. ‚ÄúThis announcement shows our strong commitment to retaining and growing existing Louisiana businesses.‚Äù

‚ÄúThe new aviation lubricants blending center reflects our continuing commitment to a safe and reliable supply of aviation and other lubricant products,‚Äù said Julius Bedford, manager of ExxonMobil’s lubricant blending plant in Port Allen.

The $215 million expansion includes investments in the Chemical Plant in Baton Rouge, in addition to a new manufacturing, packaging and distribution process unit in Port Allen.

‚ÄúOver the past three years, the corporation’s capital expenditures in the state exceeded $930 millions,‚Äù said Paul Stratford, manager of the Baton Rouge Chemical Plant. ‚ÄúThese investments help create jobs and contribute to the economic growth of the state and the region.‚Äù

ExxonMobil got a fat incentives package from the state that includes a Modernization Tax Credit valued at $1.8 million and payable over five years, along with the customized workforce solutions under the LED FastStart program. In addition, ExxonMobil is expected to utilize Louisiana’s Enterprise Zone and Industrial Tax Exemption incentive programs.

Construction for the project will begin in late 2012. The new jobs will join an existing annual payroll of $440 million supported by ExxonMobil in the Capital Region. ExxonMobil operations provide jobs for 5,500 direct employees and contractors at eight area facilities, making the company the largest private employer in East Baton Rouge Parish and the largest manufacturing employer in Louisiana.

Each ExxonMobil job supports nearly seven additional jobs in Louisiana, which translates to more than 41,500 Louisianians and their families who are impacted by the company’s business.

Comcast To Shut Down California Call Centers, 1000 Jobs Lost

Comcast Corporation (NASDAQ: CMCSA) announced that it is shutting down three call centers in Northern California. It will result in California losing approximately 1,000 jobs, including 600 in the Bay Area.

Jobs

Photo – ca.gov

Comcast will be shutting down call centers in Morgan Hill, Livermore and Sacramento effective Nov 30, 2012. In a statement, the company blamed the relocation and lay-offs on the high costs of doing business in California.

Comcast statement on the closures – “We determined that the high cost of doing business in California makes it difficult to run cost-effective call centers in Northern California. Reassigning these positions, which are focused on the customer experience, will result in all of our customers being better served in the long-term through call centers in Portland, Seattle & Denver.”

Comcast made it clear they were not downsizing on a company-wide level and the number of call center jobs at the company would remain the same. Employees of the California call centers being shut down will be able to apply for jobs at the three aforementioned out of state call centers.

Even after factoring in the 1,000 call center jobs lost to other states, Comcast still has 5,500 employees in Northern California.

After the initial Comcast statement provided by regional vice president Andrew Johnson above hit the headlines, Comcast apparently took a bit of heat from state officials and backtracked with a new statement that made no mention of business costs in California. Instead, the new statement simply says that they decided to cut down the number of call centers in the west from 13 to 10. Why all three centers to get the axe had to be in California is not re-explained.

Does strong-arming Comcast into retracting their statement make doing business in California any less costly or hassle-free? Consider where California ranks as of now, in head to head comparisons of the business climate in all 50 states.

CNBC Rankings – America’s Top States for Doing Business – California – Rank – 40

Forbes Rankings – The Best States for Business and Careers – California – Rank – 39

Statement put out by Mike Rossi, senior advisor for jobs and business development Р“It is unfortunate that Comcast’s announcement to eliminate jobs in California inaccurately placed blame on the state but I am pleased to see the executives at Comcast taking responsibility and correcting the statement.”

Would have been nicer still if California had also acknowledged the obvious and taken some responsibility to try and correct it.

Defense Cuts Force Sikorsky Out of New York, 575 Jobs Lost

Sikorsky Aircraft Corp. announced that it is closing down their Military Completions Center in Horseheads, New York. About 575 workers at the plant were informed on Monday that they had lost their jobs.

Sikorsky Black Hawk

Black Hawk (Photo – Sikorsky Aircraft Corp.)

Sikorsky cited the $487 billion federal defense budget cuts over the next decade as the reason for shuttering the plant, which is used to customize Black Hawk and Naval Hawk helicopters being sold to foreign governments.

The work will be moved to a Sikorsky plant in West Palm Beach, Florida. The company is downsizing and the 575 NY jobs will not be moved to Florida.

The plant being closed was operated by Schweizer Aircraft, a subsidiary acquired by Sikorsky in 2004. The 100,000 sq ft Horseheads, New York completion center on the west side of Elmira/Corning Regional Airport was opened in 2007 with a $15 million investment.

Sikorsky is planning to announce a bigger companywide downsizing in the next few days, which will be linked to another possible $500 billion in defense cuts that could be automatically triggered at the end of the year.

The second round of defense cuts will be triggered unless Congress can come up with a debt compromise that includes spending reductions from other sources.Studies have shown that a trillion dollar defense budget cut would cost a million jobs.

Sikorsky statement on the plant closure Р“Due to declining defense budgets and the continuing economic weakness in many markets, Sikorsky today informed employees of its intent to close the Sikorsky Military Completions Center, as of Dec. 31, 2012… Faced with these difficult economic conditions, we must eliminate excess production capacity and increase operational efficiencies to remain competitive. We will work with the employees to provide as much transition support as we can during this difficult time.”

The reactions to Sikorsky’s exit from the Empire State ranged from shock to disappointment, worries  about the ripple effect on the local economy and bafflement about what these workers will do now.

“Monday was a devastating day, plain and simple… It’s not a good day for the community and the workers there. I had no idea that this was coming. It’s a real blow to the community because they were a major employer.” РChemung County Executive Tom Santulli

“Obviously, the leadership and members of UAW Local 1752 are very disappointed with the news of the closing. The union leadership will work with the company to assist our members in this transition.” РUAW Local 1752 president Frank Piper.

“There are local businesses that supply Sikorsky, there are hotels, there are restaurants there are retail stores it is all of the above when you take roughly 30 -35 million dollars out of the economy its going to have a huge ripple effect.” – Chemung County Executive Tom Santulli

“The company will be applying for Trade Adjustment Assistance for the workers, but the big question is training them for what? Because there’s nothing in the works to replace this one…” РGeorge Miner, president of Southern Tier Economic Growth.

Sikorsky Aircraft Corp. is based in Stratford, Connecticut and is a subsidiary of United Technologies Corp., which is based in Hartford, Connecticut.

ConAgra Foods to Invest $100M in Russellville, AR

ConAgra Foods, Inc., (NYSE: CAG) announced that it will be expanding its plant in Russellville, Arkansas with a capital investment in excess of $100 million that will create 80 new jobs.

ConAgra Foods

ConAgra Foods (Photo – usc_ty/flickr)

“ConAgra Foods has a long history in Russellville and we are pleased to grow our presence in the area,” said Mike Tracy, senior vice president of Consumer Foods Supply Chain for ConAgra Foods. “Our dedicated employees, along with the support of the city of Russellville and the state of Arkansas will allow us to make great food here for many years to come.”

“With agriculture as our largest industry, Arkansas has long had an established presence in the food-processing sector,” said Arkansas Gov. Mike Beebe. “When you see world-class companies like ConAgra Foods locate and then expand in Arkansas, it shows the strength of our state and our workforce.”

The expansion comes after the company acquired Bertolli and P.F. Chang’s Home Menu frozen meals businesses earlier this year.

The Russellville plant will get new production lines for these two food products. It already produces ConAgra‚Äôs Banquet, Healthy Choice and Marie Callender’s products.

“ConAgra Foods has been an outstanding corporate citizen in the Arkansas River Valley for decades and the community is more than willing to do everything necessary to help insure the company’s success for years to come”, stated Jeff Pipkin, president of the Arkansas Valley Alliance for Economic Development (AVAED). “This is the largest industrial investment in the area since Arkansas Nuclear One was constructed over 40 years ago. This additional investment and increased employment will certainly strengthen our local economy.”

“ConAgra Foods and its predecessor companies have been an integral part of Russellville’s economy for many years,” said Russellville Mayor Bill Eaton. “It is exciting to know that their management and corporate decision makers consider our city a good investment.”

The incentives ConAgra is getting may also have had something to do with it. They are getting $742,000 for a new access road and parking lot that will be funded by the Governor’s Quick-Action Closing Fund. ConAgra is also getting tax credits linked to the number of full-time jobs created, and they will get sales tax refunds on purchases of building construction materials and machinery for the expansion.

The Omaha, Nebraska-based ConAgra Foods, Inc has had a presence in Russellville, Arkansas since 1965, and currently has 1,350 employees at the plant. With the addition of another 80 workers, the count will go up to 1,430. On a global level, ConAgra has 26,100 employees and posted 2012 revenues of $13.3 billion.

Wind Jobs Disappear Over Congressional Inaction on Tax Credits

Siemens Energy Inc. is the latest company to announce lay-offs in their U.S.wind power business. Siemens announced it was laying off 615 workers in Iowa, Kansas and Florida, and cited lack of congressional action on renewable energy tax credits which are set to expire in 2012.

Siemens wind turbines

Siemens wind turbines (Photo – Siemens.com)

The Production Tax Credit (PTC) is a tax credit of 2.2 cents per kilowatt-hour of renewable power generated and has enabled the industry to slash wind energy costs by 90 percent since 1980.

Siemens said that the lay-offs included 407 workers at their wind-turbine blade factory in Fort Madison, Iowa. Another 146 workers are being laid off in Hutchinson, Kansas and 62 more in Orlando, Florida.

Over the past five years, Siemens has poured more than $100 million into their U.S. wind power operations and built up the division to 1,650 workers. After the lay-offs, they will be back down to 1,000 workers.

Siemens has manufactured and installed 3,900 wind turbines across the nation, enough to produce electricity that can power more than 1.75 million average households.

Vestas, another wind power giant, announced last month that it was cutting 1,400 jobs, of which 20 percent is going to be in the Americas.

The American Wind Energy Association (AWEA) estimates that 37,000 wind power jobs will be lost along with $10 billion in investment in 2013, if the PTC is not extended by Congress.

A few days ago, 19 major companies who are some of the largest non-utility purchasers of renewable energy wrote a joint letter to Congress urging them to pass a bill to extend the PTC.

The letter says – “As major U.S. employers and some of the largest non-utility purchasers of renewable energy, we urge you to extend the Production Tax Credit (PTC) for wind energy before the end of the 112th Congress. A failure to pass an extension will amount to levying a tax on companies committed to buying American energy and growing the U.S. economy. In today‚Äôs economic climate, a tax hike on American businesses buying American renewable energy is unwarranted.”

The companies who wrote the letter are Akamai Technologies; Annie’s, Inc.; Aspen Skiing Company; Ben & Jerry’s; Clif Bar; Johnson & Johnson; Jones Lang LaSalle; Levi Strauss & Co; New Belgium Brewing; The North Face; Pitney Bowes; the Portland Trail Blazers; Seventh Generation; Sprint; Starbucks; Stonyfield Farm; Symantec; Timberland; and Yahoo!.

UCLA Anderson Forecast – Housing Boom to Lead Jobs Growth

The Sept 2012 UCLA Anderson Forecast has good news and bad news. The bad news is that gross domestic product growth in the U.S. will remain tepid throughout 2012. The good news is that the outlook for 2014 is considerably brighter.

UCLA Andersoneconomist David Shulman

UCLA Anderson senior economist David Shulman (Photo – uclaforecast.com)

The forecast says GDP grown in excess of three percent by 2014 will be adding 200,000 new jobs in the U.S. per month and the jobs recovery will be lead by a housing boom.

“With several quarters of 1‚Äì2 percent growth ahead of us, we do not expect the unemployment rate to dip below 8 percent on a quarterly basis until the first quarter of 2014,” says UCLA Anderson Forecast senior economist David Shulman. “However, as job growth accelerates to 200,000 a month in 2014, the unemployment rate will begin to meaningfully improve.”

“Led by multi-family construction,” writes Shulman, “housing starts are ramping up, from 612,000 units in 2011 to 763,000 units this year and just under 1 million units in 2013. By 2014, we anticipate that housing starts will be in excess of 1.3 million units and the growth in housing will account for about a full percentage point in GDP growth by 2014.”

Shulman adds that the housing boom that is building up is fueled by gradually rising home prices, record low mortgage rates, improved household formations and modest employment growth.

For California, the forecast predicts employment growth of 1.8 percent in 2012, 1.6 percent in 2013, and 2.4 percent in 2014. The unemployment rate will hover around 10.7 percent through 2012 and average 9.8 percent throughout 2013. In 2014, the Golden State’s unemployment rate will drop to 8.5 percent, just shy of 1 percent greater than in the U.S.

In addition to the national and California forecasts, UCLA Anderson economist William Yu discusses economic conditions in China and predicts a “hard landing” for China. He says the country’s three decade long bull run of rapid growth will end in 2012 and says the hard landing is due in 2013 and 2014.

The relevant point here being that the U.S. has nothing much to worry about if this happens, because the forecast estimates that even an extreme decline in China’s GDP growth from 10 percent to five percent will result in a growth reduction in U.S. GDP of only 0.2 percent.

Read more about the UCLA forecast at uclaforecast.com.

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