How Keen was 2015?
Alabama saw manufacturing advances despite national stressors
Airbus executives Allan McArtor, Tom Enders and Fabrice Brégier celebrate the first A320 in the works at the European aircraft giant’s first U.S. plant, in Mobile.
Photo by Dan Anderson
In a pattern that now seems familiar, there wasn’t explosive growth or untenable collapse this past year, just a steady drumbeat of hard scrabble recovery sprinkled with occasional victories and defeats. Here are 2015’s top business stories, as seen by Business Alabama editors and staff.
On Wings Like Eagles
After years of preamble, big airplane parts finally rolled off a cargo ship in June and proceeded, with Mardi Gras frivolity, from Mobile’s port to its sparkling new Airbus U.S. manufacturing facility. Look for single-aisle jetliners to start flying out of the $600 million, 53-acre facility this year, with a production schedule of 40 to 50 aircraft per year by 2018.
Boeing, still the largest aerospace company in Alabama, that same month opened its new research and technology center in Huntsville. The facility will serve as the company’s hub for collaborative technology development with academic institutions and research partners and employ 220 engineers, technicians and staff.
NASA saw its Space Launch System, being engineered by a team in Huntsville, win approval as the first NASA human-rated rocket in almost 40 years to clear a critical design review. That means it meets the challenges of flying to Mars. The SLS will be the most powerful rocket ever built and paired with NASA’s Orion spacecraft, it will power the American space program into the next era of exploration.
Bumps in the Road
Alabama One Credit Union, the state’s sixth-largest credit union, came under state control in August. The Alabama Credit Union Administration conservatorship order stated that the Tuscaloosa-based credit union, with $600 million in assets, lost more than $7.8 million in 2014 and $3.18 million more in the first six months of 2015. Alabama One’s ousted management filed countersuits and yet more suits were filed against former attorneys and real estate appraisers alleged to have contributed to the credit union’s reversals.
Speaker of the House Mike Hubbard, meanwhile, oversaw the year’s lawmaking sessions even as he prepared a defense on 23 felony counts of ethics law violations. His trial is set for March in Lee County and, if convicted, Hubbard would become a felon and thus outlawed from state office.
The future USS Omaha rolls out of Austal USA in Mobile.
Photo courtesy of Austal
On Land and By Sea
Austal USA, in November, launched the future USS Omaha, an Independence-class littoral combat ship bound for service in the U.S. Navy. The Omaha is the fourth ship in a Navy block-buy contract with Austal.
Polaris began hiring at mid-year for Huntsville positions as construction began on the company’s new manufacturing facility. The company plans to invest $142 million for the facility, capital equipment costs, tooling and other incidentals. The facility should be online by 2016.
Deals with Wheels
Mercedes-Benz U.S. International started work last fall on a $1.3 billion, 300-job expansion of its auto assembly plant. The project at the Tuscaloosa County site will prepare it to launch production of Mercedes-Benz next-generation sport utility vehicles, including hybrids. With the upgrades, the German automaker will have $5.8 billion invested in Tuscaloosa.
Toyota Motor Manufacturing Alabama welcomed the arrival of its 4 millionth engine in September. Toyota began manufacturing engines at its Huntsville facility in 2003 and recently invested $150 million to produce V-6 engines, along with V-8s and four-cylinders already produced there. Toyota’s total investment in Alabama stands at $850 million.
Honda Manufacturing of Alabama started producing the redesigned 2016 Pilot SUV and opened a $71 million, highly automated engine assembly line at its $2 billion, 4,000-worker auto assembly plant in Talladega County. HMA is the sole production source of the Odyssey, the Pilot and the Acura MDX luxury sport utility vehicle and the V-6 engines that power each vehicle. Over the past three years, HMA has invested more than $510 million and added more than 450 jobs in expansion efforts in Alabama.
Hyundai Motor Manufacturing Alabama in 2015 marked its 10th year of producing cars for the North American market. An economic study commissioned by HMMA and conducted by Auburn University at Montgomery found that HMMA and its suppliers generated a total impact of $4.82 billion to Alabama’s economy in 2014, accounting for 2 percent of the state’s Real Gross Domestic Product.
Things You Didn't Expect
Harper Lee set tongues a-wagging all summer long with the release of “Go Set a Watchman,” alternately called “a fraud” by one New York Times reviewer or “truthful and realistic” insight into her first novel, according the Guardian. Either way, it sold more than 1 million copies in the first week, was on the New York Times Bestseller List for 6 weeks and was the most-talked-about book of 2015.
Signal International reached a $20 million settlement agreement to resolve labor trafficking lawsuits brought on behalf of hundreds of former Indian guest workers and in August, as part of that agreement, issued an apology. It acknowledged being “wrong in failing to ensure that the guest workers were treated with the respect and dignity they deserved” as they worked in Gulf Coast shipyards after hurricanes Katrina and Rita. Shortly after, the company filed for bankruptcy protection.
In February, computer genius and cult figure John McAfee drove USA Today reporter Jon Swartz to see his fledgling incubator in Opelika. McAfee’s truck was fortified with a 1,400-pound crash guard, blinding lights, an ear-piercing wailer and an arsenal of five guns.
Tim McIlwain, of Alabama River Cellulose, is all smiles over improvements at his plant.
Photo by Dan Anderson
GE Aviation announced in October that it would invest $200 million to build two adjacent aviation facilities in Huntsville, creating 300 jobs and long-term economic growth. The factories, to be built near Interstate 565 and Greenbrier Road, will produce silicon carbide materials used to manufacture ceramic matrix composite components for jet engines and land-based gas turbines.
Georgia-Pacific put finishing touches on its $375 million upgrade in Brewton, where linerboard and cartonboard for boxes are produced. The project modernized the mill’s recovery boiler system. The company also kicked off a $110 million project at its Alabama River Cellulose operations in Perdue Hill, upgrading woodyards and a pulp machine.
FreightCar America President and CEO Joe McNeely praised his Shoals facility in the company’s annual report. Production there continues to ramp up, thanks to a $10 million expansion for railcar production at the Cherokee plant.
Alabama's Steel Backbone
Once among Birmingham’s biggest employers with 15,000 workers at its Fairfield facility, U.S. Steel announced last summer that it would be shutting down its blast furnace at that operation, costing 1,100 jobs. The company saw similar reversals in other U.S. cities. The bad news was softened somewhat by the company’s announcement that it would spend about $277 million in Birmingham to install a new electric arc furnace, but only 300 workers will be needed to run that operation.
Down the road in Tuscaloosa, O’Neal Manufacturing Services, a division of Birmingham-based O’Neal Steel, talked about opening a new plant on Nucor Steel property that would use plasma cutting lines to shape steel plates. But O’Neal Manufacturing Services announced a consolidation in December that may move around some employees and could potentially cost other workers their jobs.
Birmingham’s City Center attracted more than $1 billion in capital investment in 2015, according to Brian Hilson of the Birmingham Business Alliance. That’s double the annual average since 2011 and four times the annual average for the previous decade. Among the heavy hitters is Kamtec, an automotive supplier that announced plans in August to build an $80 million, 148,000-square-foot high-pressure aluminum casting plant at its existing Valley East Industrial Park site, creating an initial 120 jobs.
Lockheed Martin prospered from Russian President Vladimir Putin’s aggressive stance in Western Europe, which motivated Poland, Finland and Austria to arm up with Lockheed’s Joint Air-to-Surface Standoff Missile family, made in Troy.
Science and Engineering Services — a Maryland-based leader in maintenance repair and overhaul services for aircraft and ground combat systems — expanded in Huntsville with a 32,000-square-foot research facility. The $70 million expansion will create 450 jobs over five years.
AEgis Technologies Group of Huntsville announced in November that it would be a key subcontractor to Riptide Software on its award of a five-year, $47 million contract by the United States Marine Corps to continue its support of the Combined Arms Command and Control Trainer Upgrade System.
Huntsville Outfitter Hunter Shell served as the honorary ribbon shooter, nailing his targeting and officially opening the store.
Fired Up in Huntsville
Remington Outdoor Co. got its new firearm assembly and machining operations cranking in 2015 amid major management changes at midyear. Then-CEO and Chairman George Kollitides II stepped down and co-lead Director Jim “Marco” Marcotuli took over the CEO role. Trip Ferguson, who manages the Huntsville operation, told Business Alabama that the plant had 300-plus employees at midyear, easily meeting the hiring target for 2015.
Cabela’s opened its first Alabama store in Huntsville last September, giving Alabamians the option to buy snazzy shooting wear to go with their new Remingtons.
Fun with Food
Whole Foods, long a staple in Birmingham, expanded to Mobile and Huntsville.
Miss Dots, a new Southern-themed, fast-casual restaurant concept from former Zoe’s Kitchen CEO John Cassimus and business partner Tyre Stuckey, was announced in November. The first two locations are springing up in Mountain Brook and Tuscaloosa.
Birmingham-based Coca-Cola Bottling Co. United Inc. expanded its territory in 2015, taking on additional markets in Louisiana, Mississippi and Florida.
Also trendy grocery Trader Joe’s opened its first Alabama location in Birmingham.
Steris Corp., based in Mentor, Ohio, unveiled its new campus in December at the former U.S. Pipe headquarters in Birmingham’s Sloss Business District. Birmingham-based Integrated Medical Systems, a surgical instrument management and clinical consulting firm, combined forces recently with Steris in a deal totaling $175 million. Steris is a leading infection prevention, decontamination, and surgical and critical care company serving customers in more than 60 countries.
Evonik Corp. opened its first Innovation Center for research and development of medical devices and technology at the company’s Birmingham site.
Baxter International continued work on a $300 million expansion of its plant in Opelika, where the healthcare company produces dialyzers for advanced kidney disease. Full production is expected when the project is complete in 2018.
Contractor Robins & Morton Inc. officially broke ground in September on Oxford Pharmaceuticals’ 120,000-square-foot facility being built in the Jefferson Metropolitan Park-Lakeshore. The plant is expected to come online by fall of 2016 and is a new venture formed in Oxford, England.
Down on the Farm
Evonik Corp. recently started Mepron production at its Mobile site, putting a plant into service after 15 months, according to plan. Mepron is a formulation of the amino acid methionine specially developed for dairy cows by Evonik’s Animal Nutrition Business Line.
Bayer CropScience, meanwhile, plans to invest more than $200 million in partnership with Evonik to construct two chemical manufacturing units in Mobile at the Evonik manufacturing facility in south Mobile County. The companies will produce precursor materials of Liberty herbicide, a key component in Bayer’s LibertyLink weed management technology.
Franklin County Development Authority announced in April that Mar-Jac Poultry would build a new $25 million feed mill in rural Franklin County, creating 30 new jobs at its northwest Alabama operations.
Parts is Parts
Announced in 2014, Engineered Plastic Components Inc. is now operating its new $7.3 million manufacturing facility in Leeds, a suburb of Birmingham. The Iowa-based injection molder manufactures thermoplastic products for industries including automotive, commercial and consumer appliances, aerospace, scientific and medical industries.
South Korea-based KMIN USA is now operating its first U.S. plant in Chambers County, making automobile seats and ancillary parts.
Also in Chambers County, Knauf Insulation is on schedule with its expansion in Lanett to double capacity and has 182 employees manufacturing thermal and acoustical insulation, according to development sources. Work should be complete by 2016. The plant recycles 835,000 glass bottles each day, turning them into glass strands to become building insulation.
Asahi Kasei Plastics North America was advertising for workers in December for its second U.S. plant, in Limestone County, to process plastic resin into pellet product used at plastic injection molding facilities.
Reliance Worldwide, a leading maker of products for the plumbing and heating industries, is in the process of investing $50 million in Cullman, alongside its Cash Acme facility, to manufacture the Shark-Bite plumbing connection system and should begin production in early 2016.
International Automotive Components continued its $22 million expansion at its McClellan site, aiming to add 359 more jobs and 125,000 square feet of new production space by 2016. The plant makes door panels for Nissan and components for Honda minivans and Mercedes SUVs.