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Headlines Review of 2013

The Deepwater Horizon oil rig burns in the Gulf of Mexico, April 21, 2010.

The Deepwater Horizon oil rig burns in the Gulf of Mexico, April 21, 2010.

AP Photo/Gerald Herbert, File

JANUARY 2013

  • Philly Fed predicts economic gains
  • Transocean agrees to $1.4 billion payout
  • BP agrees to $4 billion criminal fine
  • Russell Brands announces layoffs
  • ArcelorMittal enters bidding for ThyssenKrupp plans
  • Unemployment drops

At the start of 2013, the Federal Reserve Bank of Philadelphia picked Alabama as second only to Nevada as states best poised for economic growth in the first six months of the year. By year’s end, Philly Fed’s comments were not so rosy, but it looked great to start.

The BP oil spill reverberations hit Transocean and BP. A $1.4 billion penalty was levied against Transocean, the Swiss owner/operator of the Deepwater Horizon oil rig that exploded, triggering the massive oil spill. And BP agreed to $4 billion in criminal penalties for the explosion and spill that killed 11 workers and fouled Gulf of Mexico waters. By year’s end, BP had won a round or two in the ongoing litigation.

Unemployment numbers announced in January showed a dip to 7.1 percent, best in months and well below the national average of 7.8 percent, but Russell Brands sullied the good news with plans to lay off 190 employees in Alexander City. Before the year was half over, the company announced that the plant would close entirely.

And international steel giant ArcelorMittal turned up in the list of potential buyers for ThyssenKrupp’s remaining south Alabama steel plant.

Melt shop at Outokumpu Oyj stainless steel mill in Mobile County.

Photo by Dan Anderson

FEBRUARY 2013

  • Finns fire up the steel shop
  • Postal Service honors Rosa Parks
  • Shelby, Baldwin counties rank high for income growth

Finnish stainless steel maker Outokumpu Oyj flipped the power switch at the north Mobile County stainless steel plant built just a few years earlier by German industrial giant ThyssenKrupp. The Finnish company paid $3.6 billion for the mill, hoping to reach a quarter share of the U.S. market for stainless. When they showed off the plant in January, they were hiring the last 150 workers needed to ramp up the mill to 24/7 operations.

Rosa Parks, the iconic symbol of the Civil Rights movement in Alabama, earned a place on a U.S. postage stamp unveiled in February. The stamp was issued in honor of the hundredth anniversary of Parks’ birth and hosted by Troy University’s Rosa Parks Museum in downtown Montgomery.

And a national ranking of the 50 U.S. counties with the most income growth pegged Shelby at 24th and Baldwin at 35th.

Sen. President Pro Tem Del Marsh, R-Anniston, left, talks with Sen. Trip Pittman, R-Daphne, on the final day of the regular legislative session. Among the big wins by the Republican majority was the Alabama Accountability Act, which gave tax breaks to parents who move their children to private schools, from public schools graded as “failing.”

AP Photo/Dave Martin

MARCH 2013

  • Battle over public education vs. charter schools
  • Sequestration hits home
  • TK official resigns over Americas projects
  • Unemployment dips again
  • Made in Alabama
  • Mercedes announces another expansion
  • Georgia tries to move border to lasso Tennessee river water

Public schools and politics met nose-to-nose in March as Republican lawmakers pushed through a provision to allow parents a tax break for moving their kids from failing public schools to private schools.

Unemployment dipped again, all the way down to 6.9 percent, but all of the state’s cities with big federal presences, especially military sites like Huntsville, Dothan and Anniston, began to get jittery about sequestration — automatic cuts triggered when federal lawmakers failed to settle a budget.

On the industrial front, Mercedes announced another expansion, this time adding a $70 million, 500-worker parts consolidation warehouse. But Gerhard Cromme, leader of ThyssenKrupp’s advisory board for 12 years, resigned in the wake of massive losses from the Americas project he championed, including the twin mills in Mobile and Washington counties and another in Brazil.

The Department of Commerce unveiled a new “Made in Alabama” logo to promote the state’s goods.

And Georgia tried once again to get more water, working to alter its northern border so that it would touch the Tennessee River.

APRIL 2013

  • Airbus breaks ground
  • Carnival chaos
  • UAW gets serious in Alabama
  • Row crops reach $1 billion value
  • Indian bingo moves to federal court

Mobilians turned out for the Airbus groundbreaking as if it were Mardi Gras — Azalea Trail Maids in antebellum finery, the Excelsior band, foreign business officials, airline presidents and everybody who’s anybody in Mobile turned out under the big top at Brookley Aeroplex to watch as the first shovels of earth were turned for a $600 million Airbus aircraft assembly plant, the first in the U.S. All during the festivities, actual earth movers hovered in the background ready to move in before the dirt was shaken from ceremonial shovels. Hoar Program Management is superintending the construction project. Meanwhile, the first supplier opened for business at Brookley, Safran Engineering.

Just across the way at the Mobile waterfront, the cruise ship Carnival stood in testimony to its own headlines. Mobile built a fancy cruise terminal to lure cruise business, but Carnival quickly turned its back on the facility. Ironically, when its Triumph cruise ship became stranded near the Yucatan, the start of a nightmare for passengers, Carnival towed the ship back to Mobile for repairs, discharging passengers at the terminal it once scorned – then bused passengers to hotels elsewhere, once again stranding some of the passengers when a bus broke down. The city joke turned somber when the ship broke loose in a freak storm, killing a shipyard worker.

Up north, the United Auto Workers moved into a more overt program to organize workers at Alabama’s auto plants. Alabama and neighboring states all brag on their right-to-work laws when enticing industry, but the UAW — with the blessing of German union IG Metall — is working to represent workers at Mercedes-Benz in Alabama, Volkswagen in Chattanooga and Nissan in Mississippi. Workers at five Alabama auto suppliers are represented by the UAW, which also is involved in organizing efforts among casino workers.

Back to basics, Alabama agriculture experts said the state’s row crops now bring in $1 billion, up 23 percent from 2011.

And one chapter in the state’s book of anti-gambling initiatives went federal in April. A lawsuit filed against the Poarch Band of Creek Indians was moved to federal court, after the tribe successfully argued that they are not governed by state law. Attorney General Luther Strange had asked a state court to shut down the PCI Gaming casinos, saying they were a public nuisance.

Signal International shipyard in Orange, Texas, one of the sites of alleged worker abuse
 

MAY 2013

  • Beach convention center
  • Bonner resigns
  • Signal International suit
  • Regions named 8th strongest bank by Bloomberg

In mid-May, Gov. Bentley signed the paperwork to use $85 million in Gulf restoration funds for development of a resort hotel at Gulf State Park. Some area residents were charmed, others said they wished the state’s only beach park would remain low key and low cost for visitors.

Also in mid-May, U.S. Rep. Jo Bonner (R-Mobile) announced he would resign from Congress to take a leadership job with the University of Alabama System. He stepped down in August. More about that in “Exit Interviews” story starting on page 21.

Signal International, which successfully fought off a class action suit charging it with human trafficking of workers following Hurricane Katrina, found itself facing a whole passel of individual suits brought by some of the most prestigious law firms in the U.S. at no charge to clients. The smaller lawsuits were orchestrated by the Southern Poverty Law Center and complained that after Katrina, the company brought in overseas workers but subjected them to inhumane living conditions. Signal International has robustly denied the claims.

At the end of May, Bloomberg released a list of the strongest banks in the U.S. and ranked Birmingham-based Regions 8th on the list.

JUNE 2013

  • BP launches campaign to recoup settlement payments
  • Colonial Properties Trust to merge with Tennessee firm
  • State’s economic growth rate lags
  • Dr. Regina Benjamin leaves surgeon general post

BP kicked off a campaign late in June to recoup some of its damage settlement payments, first sending letters to claimants’ lawyers announcing it would seek repayment if it won in appeals court.

After rosy predictions for the year, by June Alabama’s economic growth rate was at 1.2 percent, ranking 39th among the states.

Birmingham-based Colonial Properties Trust, one of Alabama’s 20 public companies, announced plans to merge into Memphis-based REIT Mid-America Apartment Communities. Another of the state’s few public companies, Otelco Inc., emerged from a short-lived bankruptcy in June, announcing that its customer services were never interrupted by the company’s financial woes.

Also in June, Dr. Regina Benjamin — a south Alabama native — resigned as surgeon general of the United States to return to the South to continue in
health care.

JULY 2013

  • Jefferson County files to end bankruptcy
  • Detroit tops Jefferson County in bankruptcy
  • Belle Foods files to start bankruptcy
  • Unemployment hits five-year low
  • Author fights for her masterpiece

On the first of July, Jefferson County filed a groundbreaking plan to work its way out of bankruptcy. Virtually all bondholders will be shorted under the plan, the first time municipal bondholders would be required to forego principal repayment. JPMorgan faces a big loss under the plan, but most debt holders will receive 80 cents on the dollar. Meanwhile, sewer service customers will face increased rates for years to come. In November, a bankruptcy judge approved the plan.

In mid-July, Jefferson County lost the dubious honor of the nation’s largest municipal bankruptcy when the city of Detroit filed an even larger total.

The next day, Belle Foods — a young grocery company that had bought up many Bruno’s stores — filed for bankruptcy. Before the year was out, Belle had sold off most of its stores.

Unemployment figures released in July show Alabama with a 6.5 percent rate, the lowest since 2008.

Late in July, Monroeville’s Harper Lee filed suit against her agent, claiming he had slickered her out of the rights to her beloved classic, “To Kill a Mockingbird.”

Out of Athens: Alabama Shakes
 

AUGUST 2013

  • Alabama Shakes way to Number 16
  • Little Repton beats giant landfill
  • Weyerhaeuser to reopen Evergreen mill
  • Suits filed over school tuition law
  • Don’t miss Birmingham

Rolling Stone magazine ranked Athens-based musical group Alabama Shakes at Number 16 on the magazine’s list of “50 Greatest Live Acts Right Now,” ranking right after Paul McCartney.

The tiny community of Repton won a big victory against a huge landfill planned for the outskirts of town. Ironically named Conecuh Woods LLC, the company hoped to build a 5,100-acre landfill to accept garbage from 28 states. Working with the Conecuh County Commission, Conecuh Woods won approval for its plans. But Repton, backed by its neighbors in Brewton, Atmore and the Poarch Band of Creek Indians, all claimed they would be harmed by the landfill. In August, a judge sided with Repton in the six-year-old suit.

Weyerhaeuser announced plans to reactivate its Evergreen mill and rehire 100 workers by the end of next year. The mill had been closed for four years because of a low demand for building products.

Just as school was opening, the Alabama Education Association filed suit over the state’s new law allowing parents to earn a tax credit for private school tuition, saying state money could end up benefitting religious organizations. The Southern Poverty Law Center also has filed suit over the new law.

Late in August, travel guide Fodor’s listed Birmingham among the best cities to visit this fall.

The RQ-7 Shadow 200, a surveillance drone built for the Army by AAI Textron, a Maryland company with offices in Huntsville.
 

SEPTEMBER 2013

  • Isolated fraud won’t stop BP payments
  • Drone dynamos
  • Kudos to Alabama Power for helping woo new industry
  • Poor Alabama

Although BP has uncovered isolated cases of fraud in damage claims from the 2010 oil spill, the court said that’s not enough to stop the company’s liability for payment to businesses that were actually harmed. Before the month was out, an appeals court sent the case back for reconsideration.

Alabama and Tennessee have teamed up to become one of the nation’s premier drone development sites. Both states would contribute to the research and development; testing would take place in southwestern Tennessee. Huntsville already has several firms that are engaged in drone research and testing.

Site Selection magazine honored Alabama Power as one of the top 10 public utilities for assisting with economic development.

Financial website 24/7 Wall Street ranked states for poverty and marked Alabama as the fourth poorest.

Workers wire a bank of electronic bingo machines in preparation for the opening of the casino Wind Creek Wetumpka.

AP Photo/Dave Martin

OCTOBER 2013

  • Government shutdown ripples across Alabama
  • Carpenter Technology expands even before opening
  • Illegal gambling in bingo costume
  • 10 million golfers

A government shutdown caused by dissension over the federal budget rippled across Alabama in September, as federal employees, then contractors and then suppliers felt the pinch. Analysts said Alabama was third hardest hit of all states.

Last year, Carpenter Technology began work on a $500 million plant in Limestone County, where it will produce super alloy products for the aerospace industry. After winning a major contract from UTC Technologies in October, the company announced plans to expand and build an additional plant across the street, even before the first plant is open.

Gambling machines confiscated in a raid on Center Stage casino were ordered destroyed and money turned over to the state, as a Houston County judge called the machines “illegal gambling cloaked in a bingo costume.” Meanwhile, the Poarch Band of Creek Indians, Alabama’s only federally recognized tribe, opened Wind Creek Wetumpka, the state’s largest casino.

The Robert Trent Jones Golf Trail celebrated its 10 millionth golfer in late October. Rather than calculating exactly which golfer clocked in at number 10 million, the Trail honored all the golfers at 26 courses at 11 sites on October 23. The first course on the trail opened in 1992.

NOVEMBER 2013

  • Boeing, Boeing
  • Blast of bad news in north Alabama
  • Business claims win in Byrne victory

The Boeing buzz began in a frenzy in early November. Workers at Boeing’s Washington state plants turned down a long-term contract after the state had approved billions in incentives to keep the new 777x plane in Washington. Immediately, rumors began flying, and Huntsville, with a strong Boeing presence already, was identified as a possible site. The state promptly confirmed its interest and began developing a proposal packet that was submitted early in December. A decision is expected in early 2014.

North Alabama had a triple whammy of job loss news this fall.  First, in September, International Paper caught the region off guard by announcing plans to close its Courtland mill, putting 1,000 employees out of work. Then, in November, Pilgrim’s Pride said it would close its 1,000-worker Boaz plant, while adding some workers at Russellville on the opposite side of the state. Shortly thereafter, TVA said it would close eight coal-fired generators, six of them in Alabama.

The U.S. Chamber of Commerce, frustrated by ultraconservative political players, put their money behind a candidate they liked in November and claimed a victory when Bradley Byrne won in the primary.

RSA CEO David Bronner
 

DECEMBER 2013

  • ThyssenKrupp mills sold
  • Unemployment up at end of year
  • War of words escalates in Medicaid battle

A partnership of the world’s biggest steelmaker, ArcelorMittal, and Nippon Steel and Sumitomo Metals purchased ThyssenKrupp’s steel mill in north Mobile County. Purchase price was $1.55 billion.

Gov. Robert Bentley and Retirement Systems of Alabama’s David Bronner engaged in a steadily escalating war of words over whether the state should accept federal funds to expand Medicaid. Bentley is firmly against it, saying that studies indicating it would bring new jobs are “bogus.”  Bronner is equally firmly in favor, saying that the state is turning away major revenue that would benefit the neediest families.

Unemployment, moving steadily down in the early months of the year, took a turn upward at the end of the year, back up to 6.5 percent, from a low of 6.2 percent in August.

Nedra Bloom is copy editor of Business Alabama.

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