Manufacturing

NEWS - Manufacturing

SBJ Staff Report

Feb 13, 2012 - Nancy Sutley, President Obama’s principal environmental advisor and Chair of the White House Council on Environmental Quality, will join Congressman James E. Clyburn, House Assistant Democratic Leader, on a tour of green manufacturing, energy efficiency and biofuel programs in the Midlands of South Carolina on Monday, February 13. This tour will highlight the blueprint the President laid out in the State of the Union for an American economy that is built to last, including through a comprehensive energy strategy that will enhance national security, protect the environment and public health, and create new jobs.  The President also laid out proposals to bring about a new era of American manufacturing, including through lower tax rates for companies that manufacture and create jobs in the United States.

The officials first will join Ashlie Lancaster, Director of the South Carolina Energy Office, to tour PurePOWER’s manufacturing facility in Blythewood, SC.  PurePOWER, a Navistar Inc. company, employs more than 250 people in the Blythewood facility, which manufactures high efficiency fuel injectors and emissions controls for large trucks.  The company received $300,000 in American Recovery and Reinvestment Act funds through the state energy office.

Next, Chair Sutley and Congressman Clyburn will visit the Calhoun County home of Jordan Johnson, an independent contractor who struggled to pay his $500 monthly utility bills after the economic downturn.  Through a pilot program at the Tri-County Electric Cooperative, Johnson received a $6500 loan for energy efficient upgrades to his home that he is repaying through the savings he has realized on his utility bill.  As a result of this program, Mr. Johnson has cut his energy bills in half.

Finally, the officials will visit Claflin University’s Biofuel Production Initiative, which is conducting research into an alternative energy sources.  The project is working to use bacteria to breakdown cellulosic material into a fuel known as butanol, which could be distributed using existing gasoline infrastructure without costly retrofitting.  Congressman Clyburn has secured $4 million in federal funding for this research and development project.

NEWS - Manufacturing

SBJ Staff Report

Feb 13, 2012 – The Nuclear Regulatory Commission (NRC) was expected to issue the final license for two new reactors at the site of the currently operating Vogtle nuclear power plant west of Savannah in Waynesboro last week, but nine national, state and regional groups have continued to fight adding new two new reactors.

And last Thursday, they asked the NRC to delay its decision until the groups can file a challenge in federal court.  While the NRC did not release their decision, the federal organization did not specify why there was a delay.

In the legal challenge that will be filed within a matter of days, the organizations will maintain that the NRC is violating federal law by issuing the license without considering the important lessons of the catastrophic Fukushima accident in Japan regarding ways the Vogtle operation should be modified  to protect public safety and the environment.

The nine organizations taking the legal action are:  Friends of the Earth, the Southern Alliance for Clean Energy, Blue Ridge Environmental Defense League, Center for a Sustainable Coast, Citizens Allied for Safe Energy, Georgia Women’s Action for New Directions, North Carolina Waste Awareness and Reduction Network, Nuclear Information and Resource Service and Nuclear Watch South.

They will ask federal judges to order the NRC to prepare a new environmental impact statement (EIS) for the proposed Vogtle reactors that explains how cooling systems for the reactors and spent fuel storage pools will be upgraded to protect against earthquakes, flooding and prolonged loss of electric power to the site.

According to the groups, the EIS should also detail how emergency equipment and plans for the nuclear plant will be revised to account for accidents affecting multiple reactors on the Vogtle site, as happened at Fukushima.

As part of the action, the organizations will also challenge the validity of the Westinghouse-Toshiba AP1000 design, on which the new Vogtle reactors are based.

The organizations are preparing to file their lawsuit next week in the U.S. Court of Appeals for the District of Columbia Circuit.  Meanwhile, they asked the NRC on Thursday, Feb. 9, to give the nine organizations time to review the licensing decision.  After such review, the groups will submit a formal motion to the NRC, asking the commissioners to suspend construction activities at Vogtle while the U.S. Court of Appeals is reviewing the license.

Although Southern Co. has already commenced construction activities at the Vogtle site, the license would allow Southern to complete construction of the containment, reactor cooling systems, spent fuel storage pools, and other major reactor components.

The organizations charge that these major structures could change substantially if they are redesigned to take the lessons of the Fukushima accident into account, and therefore continued construction of the new Vogtle reactors could be wasting money and resources.  And if the license is disapproved in the lawsuit or Fukushima-related retrofits make the project too expensive to finish, utility ratepayers in Georgia are likely to be stuck with the expense of a large and useless concrete mausoleum, similar to many other abandoned reactor projects across the U.S, the groups contend.

Separately, Southern Alliance for Clean Energy has sued the Department of Energy for failing to disclose key information about the terms of DOE’s $8.3 billion loan guarantee for the new Vogtle reactors, especially the risk posed to U.S. taxpayers should the estimated $14 billion project default.  The organizations remain very concerned that utility customers and taxpayers have been forced to put more “skin in the game” than Southern Co. and its utility partners and shareholders.  With prices of natural gas very low, even the CEO of Exelon has said publicly that he wouldn’t build a nuclear plant today, according to a statement he made last week.

The license for Unit 1, first issued in March 1987, was renewed in June 2009 and does not expire until January 2047.

NEWS - Manufacturing

By Lou Phelps, SBJ Staff

Feb 6, 2012 – It’s hard to believe that it’s been four years…that four years ago tomorrow, at about 7:25 p.m., local media began to get alerts that there had been an explosion at the Imperial Sugar plant. 

It was the first time in recent memory that local emergency groups were called into action for a major disaster in Chatham County, and it was hours before the horrible loss of life and extent of injuries became known.   

Tuesday, February 7, 2012 will mark the fourth anniversary of the massive sugar dust explosion that killed 14 workers and injured 38 others at the Imperial Sugar Refinery in Port Wentworth. The loss of life continues to be mourned in the community by family members and co-workers.

Seven months after the explosion, the federal Chemical Safety Board (CSB) board members came to Savannah in September 2009 to discuss the disaster, sharing what they had learned at that point, and providing insight into both what happened that night, and need for changes to OSHA and Federal and State regulations and management of manufacturing plants.  

The CSB concluded that Imperial Sugar had inadequately designed and maintained dust collection and sugar handling equipment, and that inadequate housekeeping practices allowed highly combustible sugar dust and granulated sugar to accumulate to explosive concentrations throughout the refinery’s packing buildings.

Today, the Chairman of the CSB, Rafael Moure-Eraso, issued a public statement on the four-year anniversary, saying that the investigation staff keeps “the memory of this tragedy close to us as we continue to advocate for changes in national workplace rules aimed at preventing such accidents in the future. We believe the safety recommendations that followed from our investigation of this accident will go far in saving lives. I am pleased to report that on this accident anniversary all but one of our recommendations have been successfully adopted by their recipients,” he said today.

Specifically, the CSB called on the Occupational Safety and Health Administration, OSHA, to “proceed expeditiously” on its 2006 recommendation that OSHA promulgate a new combustible dust standard for general industry.  “We believe such a standard is necessary to reduce or eliminate hazards from fires and explosions from a wide variety of combustible powders and dust,” he explained. “I am disappointed that OSHA has not moved forward on this recommendation. Completing a comprehensive OSHA dust standard is the major piece of unfinished business from the Imperial Sugar tragedy.”

“It is gratifying to be able to report that during 2011 the CSB designated Imperial Sugar’s responses to all five of our safety recommendations to the company as ‘Closed-Acceptable Action.’  Specifically, the CSB recommended that Imperial Sugar develop a corporate-wide comprehensive program to control combustible dust accumulation, develop training materials that address combustible dust hazards and train all employees and contractors, and improve its evacuation procedures.  We recommended Imperial Sugar comply with National Fire Protection Association’s (NFPA) recommended practices for preventing dust fires and explosions, and urged the company to conduct a comprehensive review of all of its manufacturing facilities’ adherence to NFPA standards,” he adds.   

“We recently received notice from Imperial Sugar’s property insurer, Zurich Services Corporation, that it is providing its risk engineers ongoing training in the hazards of combustible dusts, which we recommended. This will help ensure that hazards are identified during insurance inspections so that the companies can eliminate or reduce the hazard before a catastrophic accident occurs. Additionally a series of safety recommendations to AIB International and the American Bakers Association -- to develop combustible dust training and auditing materials -- also have all been given a status of “Closed-Acceptable Action.”

The CSB recently reissued its call for a dust standard from its investigation into three flash fires that occurred in a series of accidents at the Hoeganaes Corporation iron powder processing plant in Gallatin, Tennessee, taking five lives.  But OSHA lowered the CSB recommendation’s priority on its regulatory agenda in recent weeks.

“I continue to advocate for a comprehensive combustible dust standard, and encourage industry’s support.  Preventing dust explosions is a necessary investment: prevention saves lives and massive property losses.   It is my view that a comprehensive standard will save lives and prevent future combustible dust fatalities.

The CSB is an independent federal agency charged with investigating serious chemical accidents. The agency's board members are appointed by the president and confirmed by the Senate. CSB investigations look into all aspects of chemical accidents, including physical causes such as equipment failure as well as inadequacies in regulations, industry standards, and safety management systems.

NEWS - Manufacturing

SBJ Staff Report

Jan 12, 2012 - Declines in new orders and production caused the Georgia manufacturing sector rating to drop more than 6 points on the year, reports the Econometric Center at Kennesaw State University’s Coles College of Business.

Georgia’s Purchasing Managers Index (PMI) -- a reading of economic activity in the state’s manufacturing sector -- declined 6.4 points from 53.8 in January 2011.

A PMI reading above 50 shows manufacturing activity is expanding, while a reading below 50 shows it is contracting.

The PMI also was down 5 points to 47.4 in December 2011.

“As we start the new year, there is no clear trend for 2012,” according to Don Sabbarese, professor of economics and director of the Econometric Center at the Coles College of Business, who said no clear trend is evident going into 2012.

Orders and production rose into the first six months of 2011, but fell significantly in the second half. This makes it difficult to predict any direction for 2012, Sabbarese said.

NEWS - Manufacturing

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®

NEWS - Manufacturing

SBJ Staff Report

Dec 19, 2011 - The state air quality permit for Plant Washington, a proposed 850 mega-watt coal-fired power plant in Sandersville, west of the Greater Savannah area, does not meet national public health standards that even 50 year old coal-fired power plants already meet, according to a court challenge filed today by public interest groups.

The Southern Environmental Law Center and GreenLaw challenged the Georgia Environmental Protection Division’s air quality permit in the Georgia Office of State Administrative Hearings on behalf of the Fall-line Alliance for a Clean Environment, Ogeechee Riverkeeper, Sierra Club’s Georgia Chapter, and Southern Alliance for Clean Energy.

In December 2010, a state court found the initial state air quality permit for the Plant Washington violated Clean Air Act safeguards to limit harmful air pollution and directed the Georgia Environmental Protection Division to reconsider its permit.

As expected for over the past year, the Environmental Protection Agency recently set national standards to limit hazardous air pollutants from coal-fired power plants. The state permit does not meet the national standards for limits on harmful emissions from the plant, including dozens of hazardous air pollutants that can cause cancer, birth defects, heart disease, developmental disorders, and other serious injuries, they contend.

Under its permit, the state would allow Plant Washington to emit 36 times more mercury and 11-45 times more hydrogen chloride than the draft EPA standard would allow. Georgia Power’s Plant Hammond has achieved lower emission levels of these pollutants. Three of Plant Hammond’s four units were built in the 1950s; the fourth was built in 1970.

Around the country, 117 units emit less mercury and 99-168 units emit less hydrogen chloride than what the state permit allows.

Plant Washington is a project of Power4Georgians, a company organized by Cobb Electric Membership Corporation (EMC) and four other EMCs.

“It’s déjà vu all over again,” said Justine Thompson, Executive Director of GreenLaw. “The state has again issued a permit that fails to afford its citizens the maximum degree of protection against toxic air pollution.”

“The state isn’t even requiring Plant Washington to meet national public health standards that a 50 year old plant already meets,” said Brian Gist, an attorney at the Southern Environmental Law Center. “If the state won’t protect its residents—including the most vulnerable infants, pregnant women and the elderly—from hazardous air pollution and require this plant to meet national standards, we’ll ask the courts to enforce the law.”

“The EPD is supposed to protect the health of the citizens of Georgia and our natural resources. This air permit for Plant Washington does neither of those things,” said Katherine Helms Cummings, director of the Fall-line Alliance for a Clean Environment.

“Plant Longleaf was cancelled just as the EPA announced new tougher standards for mercury emissions,” said Dianna Wedincamp, with the Ogeechee Riverkeeper. “Common sense indicates that the state should not issue a permit for Plant Washington that adds 36 times more mercury to the environment than the new EPA standards allow when mercury levels have been a problem in our rivers for decades.”

“Since Power4Georgians has no experience developing coal-plants, it’s not surprising that this glaring oversight happened,” said Colleen Kiernan Director of the Georgia Chapter of the Sierra Club. “Failing to meet major federal health protections isn't their first major mistake, and won’t be their last. Georgians cannot trust Power4Georgians with billions of ratepayer dollars.”

“Power4Georgian’s lack of compliance in the air permit with the new mercury standard is a notable omission,” stated Ulla Reeves regional program director for Southern Alliance for Clean Energy. “Claims by Dean Alford that Plant Washington would be among the nation’s cleanest coal plants are flat out mistruths and the excess mercury currently permitted is clear indication of this falsehood.”

NEWS - Manufacturing

By Lou Phelps, SBJ Staff

Dec 12, 2011 - Morris Publishing Group, LLC announced Friday that the company has entered into a purchase and sale agreement with Lulscal, LLC, a Colorado limited liability company, for the sale of the company’s newspaper building and real estate located at One Press Place, in Athens. The building is situated on approximately 3.1 acres.

Morris Publishing will continue to publish its newspaper, the Athens Banner-Herald, following the sale, according to Stephen K. Stone, Senior Vice President and Chief Financial Officer.  

The company also announced the sale of its building in Conway, Arkansas, where the company publishes a seven-day daily newspaper, the Log Cabin Democrat.

Under the terms of the agreement in Athens, Lulscal will pay Morris Publishing $13,474,500 in cash at closing, no later than March 1, 2012. The purchase price will increase by $3,333 per day until closing if Lulscal does not complete the purchase by March 1; they are required to close no later than 150 days, though Morris states that the buyer has “broad rights to inspect the Real Property and may terminate the Agreement for any reason within 120 days after the date of the Agreement.”

Morris Publishing will have the right to lease back the property only through the end of 2012, and will be renting the first floor, paying $42,306 a month, plus renting additional industrial space and other space in the building for an additional $28,808 a month, on a month to month basis.

Morris’ lenders of its working capital facility, CB&T – a division of Synovus Bank - had to agree to the deal as part of the publishing company’s loan and line of credit agreement signed this past April 2011 that provided Morris with a line of credit for operations.

Despite cuts in personnel and other operating costs, the company continues to report losses or breakeven positions on operations, before paying annual interest on its primary, post-bankruptcy restructuring loans of more than $7.1 million a year in interest payments, alone.

Synovus agreed that Morris Publishing could sell the Athens building, and lease it back; sell the company’s newspaper building in Conway, Arkansas for a projected $665,000; and use the net cash proceeds to prepay any balances under its Working Capital Facility; and attempt to find new financing without terminating the Working Capital Facility as long as the new notes do not exceed $ 3 million.   

If consummated, the sale of the Real Property would constitute an "Asset Sale" as defined in Morris Publishing’s Indenture dated March 1, 2010 with respect to its $100 million aggregate principal amount of Floating Rate Secured Notes due 2014. Under the Indenture, Morris Publishing is required to use the “Net Cash Proceeds” (after deducting certain expenses and taxes, as defined in the Indenture) from an Asset Sale to prepay any amounts outstanding under its Working Capital Facility and then to offer to repurchase New Notes from note holders on a pro rata basis at a purchase price of 101% of the face amount of the New Notes repurchased.

Morris Publishing expects to use the Net Cash Proceeds of the sale of the Real Property to repurchase New Notes in accordance with the Indenture.

The company’s management views this sale as an important step in Morris Publishing's efforts to repay and/or refinance all of the indebtedness represented by its principal borrowing, according to Smith. “Morris Publishing will explore refinancing opportunities, subject to market conditions, with hopes to repay and/or refinance this indebtedness in 2012,” Smith reported to the SEC.

NEWS - Manufacturing

SBJ Staff Report

Dec 12, 2011 - Georgia Power President and CEO Paul Bowers announced a series of organizational changes and numerous appointments last week in an effort to enhance the company's efficiency and effectiveness, and streamline operations, he said. All changes are effective Jan. 1.

The organizational changes fill current officer and other leadership vacancies, and realign customer service with the marketing organization, he added.

"In addition to enhancing our company's efficiencies, these changes have created opportunities for movement within our leadership ranks," Bowers said. "With recent retirements and promotions, I am pleased we can provide new cross-functional and cross-company opportunities for our team." The officer additions and changes include:

- Land Vice President Walt Dukes will become senior vice president of Metro Atlanta Regions, replacing Richard Holmes, who is retiring at the end of the year.

- Metro Atlanta East Region Manager Lenn Chandler was elected to replace Hazelton as Northeast Region vice president.

- Metro Atlanta West Region Manager Pedro Cherry was elected vice president of community & economic development, replacing Kevin Fletcher, who retired earlier this year.

- Mike Clanton, who currently serves as energy sales and efficiency vice president, will assume the duties of land vice president.

- Mike Hazelton, who currently serves as Northeast Region vice president, will assume the role of vice president of marketing.

- Danny Lindsey, who currently serves as general manager of distribution engineering, construction and maintenance, will become transmission vice president.

- Murray Weaver, vice president of Southern Wholesale Energy, will assume Clanton's duties as vice president of sales.