By Lou Phelps, SBJ Staff

Jan 30 – Automotive Paint & Equipment of Savannah is doing its part to protect the environment by converting its tenth body shop to PPG’s waterborne technology, according to A.P.E.’s General Manager, Lonnie Strickland, of Savannah. (pictured.)   It is an effective solution for lowering VOC emissions- improving air quality and our environment. Waterborne paint is mandatory in Europe, Canada, California and parts of the northeastern United States.

The line of paint is called Envirobase High Performance, or EHP for short, and represents the 3rd generation advancement of the innovative, waterborne technology that PPG first introduced in 1999. Though it has not yet been put into regulation in Georgia, several collision centers are leading the way in their industry by making the switch early, explained Strickland.

“After getting familiar with EHP, we are finding it to be faster, better color match, lay’s down better and is easier to blend than solvent based paint. Painters using EHP would not go back to solvent based paint,” he adds.

Ward’s Auto Paint & Bodyworks of Savannah has just become A.P.E.’s newest partner in this aspiring movement. Ward’s has three locations in Savannah, two of which have already made the conversion to waterborne technology, with the third switching soon. Another collision center using the waterborne technology is Chatham Parkway Toyota/Lexus Collision Center. Chatham Lexus converted to PPG’s waterborne system in early 2009, and has continued to remain a frontrunner in Savannah’s collision repair industry.

“The Waterborne paint system has proved to be very good for us. The Refinish technicians adjusted to it easily. The paint matching is a lot easier. We always welcome the opportunity to use a “greener” product and improve quality at the same time. We work on all makes and models including our Luxury line, Lexus. We have to provide quality repairs and refinishing on every vehicle, the waterborne paint system helps us provide that to our customers,” said Joanie Iaco, Chatham Parkway Toyota/Lexus Collision Center Manager.

Behind these conversions to waterborne technology is an experienced and trusted company, Automotive Paint & Equipment, according to Iaco. A.P.E. has five locations in Georgia, in Warner Robins, Statesboro, Savannah, Dublin, and Brunswick.

By Lou Phelps

Jan 30, 2012 - The Memorial Hospital board of directors agreed Wednesday night to agree to change their By-Laws, and provide the Chatham County Commissioners with the power to appoint four of the hospital’s 17-member board of directors, if the Commissioners will agree to guarantee $250 million of the hospitals’ debt.

County officials have stipulated the requirement as part of its terms to guarantee the hospital system’s debt, now under consideration by the Chatham County Commissioners.

Chatham County owns all of Memorial Hospital’s buildings and its land (except for The Provident building), assets that are overseen by the Chatham County Hospital Authority, appointed by Chatham County Commissioners. But Memorial Hospital, for years, has been the guarantor of those loans, and makes all loan payments. No County tax funds are used.   

Lenders have required strict financial covenants, such as insuring that the hospital has 90 days operating cash on hand, because of the troubled financial results of the hospital over the past ten years, including a reported loss of more than $16 million in 2010.  The financial picture has also meant that Memorial has been unable to refinance the loans, or secure additional borrowing for needed capital improvements and expansion.   

Sometime this Fall, the Memorial Hospital Board of Directors voted to ask the Chatham County Hospital Authority to change the methodology – to ask the County to guarantee the loans versus the Hospital Authority.  There is no public record of the topic on the Memorial board agendas, however, and it does not appear in the Board’s published minutes. The Hospital Authority voted in public, according to their minutes, to make the request on October 5, 2012.  (See related story: Jan 30 - CEN Asks Memorial to Review Open Meeting Law Procedures.)

And, the Chatham County Commissioners discussed the topic in public at their December 12 meeting, though they have deferred any discussion to date on the advice of County Attorney Jonathan Hart. 

Hart has advised the Commissioners to more fully understand the implications to the County’s bond rating if they take on the Memorial debt in light of other significant financial obligations the County potentially has ahead.  These include possibly guaranteeing loans for a new hotel on Hutchinson Island, and absorbing the operating costs of the new County jail now under construction.   

Memorial’s covenants are choking, in their opinion, including a requirement to have 90 days of cash in reserve, a savings account in effect, according to Maggie Gill, current CEO of the hospital, and previously Memorial’s CFO for several years. . Memorial has never missed a bond payment

If the Chatham County Commissioners agree to guarantee Memorial’s loans, the hospital will not have to keep as much cash on reserve.  “There will still be a certain level of covenant requirements, but lower,” explained Curtis Lewis after the board’s meeting on Weds. Jan 25.

He estimates that they hospital would be able to free up “from $10 to $20 million in cash that could be used for needed capital improvements,” Lewis explained.  Memorial’s emergency room, for example, was built to handle 44,000 patients a year, but last year saw over 96,000.  And, the hospital’s security system for both the staff and patients is not up to standard.  The hospitals weak financial history has prevented them from securing additional borrowing for needed improvements.

What Memorial is seeking is analogous to the community banking crisis and tightening Federal banking regulations. Community banks are upset that banking regulators are requiring them to have better management practices and keep more money on reserve to weather failed loans, which restricts their loan activities.  But many consumers would agree with the changes in light of  the large number of Georgia bank failures.

SBJ Staff Report

Jan 30, 2012 - Gov. Nathan Deal released his recommendations to ensure the short- and long-term success of job creation and business growth in Georgia last week, the final report of the Georgia Competitiveness Initiative aimed at helping Deal’s economic development team develop statewide economic strategies and action steps. Included is a summary about the issues and challenges of each of the state’s 12 regions.

“Our goal is for Georgia to be the No. 1 state in the United States for business,” said Deal. “Thanks to the input from thousands of business leaders in every region, we now have the information we need to develop and implement strategic changes to the state’s existing assets, to ensure we continue to outpace our competition around the Southeast and the nation.”

The initiative examined six key factors identified by site selectors as the most important influencers in corporate location and expansion decisions: infrastructure; innovation; education and workforce development; friendly business climate; global commerce; government efficiency. The final report identifies opportunities, strategies and action steps in each of these categories.

Education and workforce development was, by far, the category cited by survey respondents as the most critical area in need of attention. The Governor’s Office of Workforce Development has already launched the “Go Build Georgia” program in response to feedback about the need for workforce in the skilled labor trades. 

From the Coastal Georgia region, both Steve Green of Stephen Green Properties and Allen Rice, owner of Savannah Luggage Works from Vidalia, served as committee members. Curtis Foltz, Executive Director of the Georgia Ports Authority served as an Ex Officio member.

Coastal Georgia, in Region 12, ranked education and workforce development as its highest ranking issue, followed by the region’s business climate. Companies interviewed seek reduced regulations and lower business taxes.

Coastal Georgia Region 12’s Highlights:

• Nurture our relationships with military bases

• Identify and implement viable “best practices” for local permitting offices and timelines for  response

• Tailor education to jobs with targeted, successful companies and industry sectors

• Foster partnerships between higher education institutions within the region

• Create regional strategic plans for international recruitment and exports

• Gather information from local governments,businesses, and industry as trade missions are designed in order to ensure a positive impact on Georgia’s economy

• Partner with environmental institutions in order to learn about new innovations.

• Consider infrastructure enhancements to maximize productivity and economic opportunity, such as raising truck weight requirements and port expansion

• Improve fiber infrastructure to support a knowledge-based economy/business environment

• Maintain intercoastal waterways and support secondary airports

• Continue to support the Georgia Ports Authority Savannah harbor deepening and expansion project

• Develop strategies to attract retirees to the region

To enhance Georgia’s business climate, the governor has proposed several legislative changes to the state’s statutory incentives, including sales and use tax exemptions on energy used in manufacturing and for construction materials for competitive projects. Deal has also proposed a modernization of Georgia’s job tax credit structure.

Many of the participants concerns’ regarding transportation and infrastructure issues are being addressed in current initiatives, such as the upcoming referendum for the Transportation Investment Act of 2010 and the Savannah Harbor Expansion Project, said Deal.  The report reflects region-wide acknowledgement of the importance of Georgia’s ports to global commerce, and the critical need to keep them and the state’s other logistics assets competitive.

The Georgia Competitiveness Initiative is a public-private venture being led by the Georgia Department of Economic Development and the Georgia Chamber of Commerce, along with a 23-member steering committee. Data was collected and compiled by UGA’s Carl Vinson Institute of Government.

“What really struck us about this process as we gathered data, and again in the final report, was the remarkable similarity of opinion among the regions about the need for a sustained, quality workforce; a better accessibility to capital and the desire for reduced regulation, a universal support for innovation and small enterprise,” said Chris Cummiskey, commissioner of the Georgia Department of Economic Development. “It has been a very, very rewarding process and will continue to be as we move into the implementation phase.”

“We agree with Governor Deal that there is nothing more important for Georgia today than ensuring our competitiveness — both with the rest of the nation and the world,” said Chris Clark, president & CEO of the Georgia Chamber. “We were honored to be a part of this process and look forward to using what we learned to ensure that existing companies have what they need to be successful and to continue to attract new jobs and investment throughout the state.”

 The full report is at www.georgiacompetitiveness.org.

Published by Savannah Business Journal.®All Copyrights Reserved ©2011. www.savannahbusinessjournal.com®

By Lou Phelps, SBJ Staff

Jan 25, 2012 - In his State of the Union address last week, President Barack Obama laid out what he termed a ‘Blueprint for an America Built to Last’, encouraging companies to create manufacturing jobs in the United States while removing deductions for shipping jobs overseas and encouraging insourcing.

During the past two years, we have begun to see positive signs in American manufacturing – with the manufacturing sector adding more than 300,000 jobs since December 2009, according to the President, with companies engaging in the emerging trend of “insourcing” by bringing jobs back and making additional investments in the United States.

The White House then released details on how the Obama administration seeks to build on this progress.  They include six proposals he wants Congress to act on immediately to encourage job growth, and that he states are fully paid for by closing tax loopholes that encourage the shifting of jobs and shielding of profits overseas.

The measures the President announced will help support the manufacturing sector in Georgia, which employs 347,700 workers across the state, and will increase the incentives for the approximately 7,100 manufacturing firms located in Georgia to invest and create new jobs here rather than abroad.  In addition, the Obama administration believes the measures, if passed by Congress, would encourage other manufacturers to start up, and also create additional jobs with companies that support manufacturers - up and down the supply chain, and in manufacturing communities.

Specifics on what the President terms his ‘revenue-neutral reform package’ include:  

1.      Removing tax deductions for shipping jobs overseas and providing new incentives for bringing them back home (revenue neutral): The tax code currently allows companies moving operations overseas to deduct their moving expenses – and reduce their taxes in the United States as a result.  The President is proposing to change that.  These deductions will be denied, and companies will no longer be provided deductions for moving their operations abroad. At the same time, the President is proposing to give a 20 percent income tax credit for the expenses of moving operations back into the United States to help companies bring jobs home.

For example: If a company was closing a plant to move that plant overseas and incurred $1 million in expenses – ranging from the cost of scrapping equipment to shipping physical capital to clean up costs – it could right now deduct those expenses, and get a tax reduction of $350,000 (assuming the firm faces the 35 percent statutory tax rate).  The President proposes to eliminate this tax deduction.  And, if a corporation moving jobs to the U.S. incurred similar expenses, the President proposes to provide that company with a tax credit of $200,000 to help offset these costs and encourage investment in the U.S.

2.      Targeting the domestic production incentive on manufacturers who create jobs here at home and doubling the deduction for advanced manufacturing (revenue neutral):  In conjunction with the President’s broader commitment to corporate tax reform, the Administration is proposing measures to provide incentives for manufacturing in the United States.  The Administration is proposing to reform the current deduction for domestic production by more narrowly focusing it on manufacturing activities—for example, it would no longer cover oil production.  These savings would be invested in expanding the deduction for manufacturers and doubling for advanced manufacturing technologies from its current level of 9 percent to 18 percent.

3.      Introducing a new Manufacturing Communities Tax Credit to encourage investments in communities affected by job loss ($6 billion in credits):  The President is proposing a new credit for qualified investments that help finance projects in communities that have suffered a major job loss event. This credit will provide $2 billion per year in incentives for three years.  For this purpose, a major job loss event occurs when a military base closes or a major employer closes or substantially reduces a facility or operating unit, resulting in permanent layoffs.  The tax credit would support qualified investments in this affected community – made in conjunction with State Economic Development Agencies and other local entities – that improve local economic growth.

4.      Providing temporary tax credits to drive nearly $20 billion in domestic clean energy manufacturing ($5 billion in credits):  The President is proposing to extend tax credits to drive nearly $20 billion of investment in domestic clean energy manufacturing, ensuring new windmills and solar panels will incorporate parts that are produced and assembled by American workers.  This Advanced Energy Manufacturing Tax Credit – which was oversubscribed more than three times over – goes to investments in clean energy manufacturing in the United States. The additional $5 billion in tax credits the President is proposing will leverage nearly $20 billion in total investment in the United States.

5.      Reauthorizing 100% expensing of investment in plants and equipment ($4 billion):  The President is proposing to extend for all of 2012 a provision that allows businesses to expense the full cost of their investments in equipment, spurring investment in the United States.  Over the next two years, this would provide businesses large and small with $50 billion in tax relief, with much of that recovered by the Treasury in subsequent years.

6.      Closing a loophole that allows companies to shift profits overseas (raises $23 billion):  Corporations right now can abuse the tax system by inappropriately shifting profits overseas from intangible property created in the United States.  The President is proposing to close this loophole.

At the same time as the President is calling for immediate enactment of this plan, he is also pushing forward on a framework for corporate tax reform that would encourage even greater investment in the United States, while eliminating tax advantages for outsourcing.  This framework will include:

- Making companies pay a minimum tax for profits and jobs overseas and investing the savings in cutting taxes here at home, especially for manufacturing: The President is proposing to eliminate tax incentives to ship jobs offshore by ensuring that all American companies pay a minimum tax on their overseas profits, preventing other countries from attracting American business through unusually low tax rates.  The savings would be invested in cutting taxes here at home, especially for manufacturing.

- Making permanent an expanded Research and Experimentation Tax Credit:  The President has proposed to make permanent the Research and Experimentation Tax Credit, while enhancing and simplifying the credit. About 70 percent of the benefit directly supports jobs in the United States, and every dollar spent encourages U.S.-based investment, as only research and experimentation performed in the United States is eligible.

- Simplify the tax code and close loopholes: Over the nearly three decades since the last comprehensive reform effort, the tax system has been loaded up with special deductions, credits, and other tax expenditures that help well-connected special interests, but do little for our Nation’s economic growth.  The President’s framework will close these loopholes and simplify the tax code so businesses can focus on investing and creating jobs rather than filling out tax forms.

- Providing tax incentives to help businesses grow and invest: Building off earlier measures, the President signed into law a provision that allowed businesses, both large and small, to immediately write off 100% of the costs of new investment in equipment in the United States.  This is among the 17 tax cuts the President has signed into law for small businesses, including measures that temporarily eliminated capital gains taxes on key small business investments and raised expensing limits for small firms.

- Providing tax incentives to support domestic investment in clean energy technology manufacturing:  The Recovery Act’s Advanced Energy Manufacturing Tax Credit provided $2.3 billion in incentives that catalyzed an additional $5.4 billion in private sector investment in projects to manufacture the next generation of solar, wind, geothermal, vehicle, energy efficiency, and other clean energy technologies.

- Temporary tax cuts to increase investment and jobs: The President has signed into law $200 billion in tax relief and incentives for America’s businesses to encourage them to make new investments and create new jobs – relief that was paid out over the last three years.  This includes provisions that directly benefit those businesses that did the most to boost investment and hiring.

- Cracking down on overseas tax avoidance and loopholes:  The President has taken strong steps to crack down on overseas tax evasion and loopholes – measures that will save billions of dollars over the next decade and make sure that everyone plays by the same rules.  This includes signing into law the Foreign Account Tax Compliance Act, which targets tax evasion by U.S. citizens holding investments in foreign accounts, as well as measures to crack down on abuse of foreign tax credits through games that allowed multinational companies to inappropriately reduce the amount of taxes they paid here at home.

Published by Savannah Business Journal.®All Copyrights Reserved ©2011. www.savannahbusinessjournal.com®