Home Tags July 2016

July 2016

Top News Links: Friday, July 29

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Bentley says lottery would ease Medicaid crisis

Alabama Gov. Robert Bentley says a state lottery isn’t the “perfect option” for funding government, but claims it is the only one left. In an opinion piece submitted to news outlets, Bentley expanded on his reasons for calling a special session on a state lottery. The governor said he could not “watch as our most helpless and vulnerable people go without a doctor's care.” – AP/TimesDaily

Calhoun County supports Kronospan expansion

Calhoun County commissioners on Thursday agreed to join the city of Oxford in providing incentives to an Eastaboga plant in exchange for promised jobs. Calhoun County Administrator Ken Joiner said the $362 million expansion by wood flooring producer Kronospan is “unheard of.” The county has agreed to pay $375 per job created for five years, up to $75, 000. The company believes the expansion will create approximately 160 jobs. – Anniston Star

Auburn grad becomes new CEO of eHarmony

A Tennessee Valley man is now leading one of the most popular online dating services. eHarmony has selected its vice president and original team member Grant Langston as the company's new CEO, replacing company founder Dr. Neil Clark Warren. Warren became the face of the company as he was featured in many of the company's television commercials. – WAAY

Regions closing 63 branches in October, 3 in Alabama

Regions Financial Corp. will be closing 60 branches nationwide before the end of the year as part of a cost-cutting strategy. There's more to come – these 63 are part of a plan to consolidate between 100 and 150 branches through 2018. – AL.com

HealthSouth reports earnings, acquisitions growth

HealthSouth Corp. on Thursday reported its results for the second quarter ended June 30. “The second quarter was another strong quarter for HealthSouth with volume, revenue, and earnings from our recent acquisitions complementing solid organic growth, ” said CEO Jay Grinney. – PRNewsWire

Florida, Alabama tops in home sales for cash

Irvine, Ca-based CoreLogic is report that cash sales accounted for 31.6 percent of total U.S. home sales in April 2016, down 2.8 percentage points year over year from April 2015. Florida had the largest cash sales share of any state at 45.5 percent, followed by Alabama (45.3 percent). – World Property Journal

Recovery may be slowest in history

The Great Recession has long given way to what some have called the sluggish recovering, a rebound that up until now has been the slowest economic comeback in modern times. But that has been changing this spring and summer as economic indicators have improved and further evidence of forward movement is expected Friday when the latest GDP numbers come out. – AL.com


compiled by dave helms

Top News Links: Thursday, July 28

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Bentley says lottery will be on special session agenda

Alabama Gov. Robert Bentley says he is calling a special legislative session for a state lottery. “We must once and for all solve problems that have held our state back for decades. The state of Alabama has not and cannot at this time pay for the most basic services we must provide to our people, ” Bentley said in a video message released on his social media pages. – ABC3340

Meet the lawyers in upcoming impeachment throwdown

In the coming months in Montgomery, there’s going to be a legal throwdown, and you’re paying for it. Just a few days ago, lawyers for the respective sides were chosen in the battle to impeach, and possibly indict, Gov. Robert Bentley over allegations he used the power and benefits of his office to facilitate his alleged affair with a former top aide, Rebekah Caldwell Mason. – Lagniappe

Manufacturing sustainability summit set Aug. 18-19

The Summit for Sustainability in Materials & Manufacturing, Aug. 18-19 at the U.S. Space & Rocket Center in Huntsville, will educate manufacturers on effective ecological efforts, from global policies to small-scale tactics,  to create more viable industry and a prosperous planet. Conference programming will focus on strategic resource management and address opportunities to implement cost savings due to sustainable practices. – News release

Mercedes put electric heavy-duty truck on calendar

Mercedes-Benz outlined plans to start selling an electric heavy-duty truck in about five years, a week after Tesla Motors' initial sketch on battery-powered commercial vehicles failed to impress investors. The Mercedes-Benz Urban eTruck will have a range of about 120 miles per battery charge and capacity for loads of as much as 26 metric tons, parent company Daimler said today in a statement. The model, targeted for inner-city tasks such as supermarket deliveries, could go on sale by the start of the next decade, it said. – Automotive News

Redstone Arsenal braces for armored brigade rotation

The Army will soon begin heel-to-toe rotations of an armored brigade combat team in Europe and that means a lot of work for Redstone Arsenal's Army Materiel Command. The 4-star command that provides everything the soldier needs to operate at home and abroad will be heavily involved in the deployments. Major General Steven Shapiro, AMC Chief of Operations, says the plan has been in the works for nearly a year. – WAAY

Shoals jobless rate spikes to 7.3 percent in June

The Shoals unemployment rate jumped to 7.3 percent in June, a month that also saw its civilian labor force grow by nearly 600 people. The June rate is up from 6.4 percent in May, according to the latest figures from the Alabama Department of Labor. It is down, however, from the 8 percent mark in June 2015. – TimesDaily

Gas prices expected to drop in Alabama

The good news for drivers – and the bad news for the energy industry – is that the stockpile of summer gas is too high. It’s so high that bulk gasoline suppliers are abandoning summer blend production and starting to make winter-blend gas that they can’t sell until September, according to Gas Buddy. – Montgomery Advertiser


compiled by dave helms

Top News Links: Wednesday, July 27

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JetBlue orders 30 more Airbus A321s

JetBlue Airways ordered 30 Airbus A321 jetliners this week valued at $3.6 billion, many of which are set to be built the at the aircraft manufacturing company's assembly plant in Mobile. The sale includes 15 A321s with the current engine option (ceo) for delivery starting next year, and 15 more A321s with new, fuel efficient engines starting in 2020. – AL.com

Governor sued over building hotel with BP funds

The state auditor has refiled a lawsuit against Gov. Robert Bentley's effort to build a hotel and conference center at Gulf State Park. Auditor Jim Zeigler and state Rep. Johnny Mack Morrow filed the lawsuit Tuesday in Montgomery court. The lawsuit challenges the state's use of oil spill funds on the project. – ABC3340

Motus featured on ‘Jay Leno’s Garage’

Motus is a Birmingham-based motorcycle manufacturer that is starting to reach the big time. Now the maker of America’s only premium brand of sport-touring motorcycles and proprietary V4 engines, Motus was featured this week on Jay Leno's Emmy-winning series “Jay Leno's Garage” on YouTube. – Sports Rider

Cruise terminal renovation well above estimate

Officials said Tuesday that upgrades at the Mobile, Alabama Cruise Terminal are costing local taxpayers $1.7 million more than expected. The original estimate for upgrades was around $2.4 million, so that's the amount the city received from the state. Now it's estimated that when it's all said and done, the terminal repairs will cost $4.1 million. – WPMI

UA forecast for 2016 growth at modest 1.9 percent

Alabama’s economy is expected to grow 1.9 percent in 2016 while the state’s businesses remain relatively cautious about hiring, according to a midyear report released by The University of Alabama’s Center for Economic and Business Research. The expected growth for 2016 is slightly lower than the 2.4 percent grow seen in 2015. – News release

Renovation on former Red Cross building wins tax credits

A massive mixed-use project in downtown Birmingham is one step closer to fruition following the approval of federal tax credits. Attorney Eric Guster is planning to renovate the former Red Cross building on Third Avenue North – and he just got a big boost this week when he learned he'd been granted 20 percent federal tax credit for historic preservation. – AL.com

Birmingham-based Shipt acquires $20.1M in new funding

Shipt, the nation’s fastest growing online grocery marketplace, has secured $20.1 million in Series A funding. Participants in the round included Greycroft Partners, Harbert Growth Partners and e.ventures. Since its launch in Birmingham, Alabama, in 2014, Shipt has grown to deliver groceries in 27 cities across 10 states with a community of more than 5, 000 shoppers. – News release

Birmingham-area waterways to benefit from grants

Three Birmingham-area waterways will see environmental improvements, thanks to grants from the Five Star and Urban Waters Restoration program. Turkey and Village creeks in Jefferson County and Shoal Creek in Shelby County will benefit from the grants, which will help reduce erosion, aid water quality and replace invasive plants with native species. – Alabama News Center


compiled by dave helms

Top News Links: Tuesday, July 26

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Alabama boss new CEO of ArcelorMittal North America

Chicago-based ArcelorMittal North America has named Robrecht Himpe as its new CEO. Himpe will remain based at the steelmaker's Calvert operation in Mobile County, where he served as executive vice president of ArcelorMittal North America and CEO of the Calvert operation. Himpe will spearhead the company's Action 2020 efforts, designed to create “an agile and efficient structure that is adept at responding to market challenges and opportunities with confidence.” – IIB

Lottery back in discussion for special session

Alabama voters may be deciding on a lottery when they go to the polls in November. Several lawmakers say a lottery bill is one of the top options in a special session expected this summer. Lawmakers are waiting for Governor Robert Bentley to call the session but will meet in Montgomery today to discuss plans. – ABC3340

Hyundai reports 10th straight profit drop

South Korean automaker Hyundai slipped to its 10th straight profit drop in the second quarter and warned of a tough second half as it soaks up stiff competition and shrinking demand for its mainstay sedans in the United States. The world’s fifth-biggest automaker, together with affiliate Kia Motors, said on Tuesday its April-June net profit slipped 2.6 percent to $1.46 billion from a year ago. – Reuters/Gulf News

Montgomery Hyundai plant outproduces counterpart

The Hyundai plant in Montgomery produces almost twice as many vehicles per hour as the company’s plants in Korea while Hyundai’s regular workers here get paid a lower average salary than the ones in Korea, according to The Korea Herald as well as data from the company and other sources. – Montgomery Advertiser

Universities nationwide build new, ignore old

Universities and colleges collectively face a shortfall of a record $30 billion for what they variously call “deferred maintenance” or “deferred renewal” to deteriorating buildings and other infrastructure, according to an estimate by the national association representing facilities officers. They nonetheless continue to build more—spending a record $11.5 billion last year—in the hope of attracting students at a time when enrollment is leveling off or falling. – The Atlantic

Startup Weekend planned in Mobile Aug. 26-28

Startup Weekend events are part business pitch competition, part educational experience and have a strong reputation for fostering a supportive environment for business innovation. Mobile will get in on the Startup Weekend party Aug. 26-28, organizers said Monday. – New release

U.S. trade measures finally helping steel producers

Three leading U.S. steel companies have reported enhanced profitability recently, in one case, less egregious negative results. All three attribute their brighter financial picture to falling steel imports and those thanks to the trade sanctions the United States government has imposed on foreign steel producers, most notably China, but others as well. – American Journal of Transportation

Job fair today for service members, vets and military spouses

A job fair for service members, veterans, and military spouses is happening this morning at the Teague Arena, Garrett Coliseum Complex, in Montgomery. An employment workshop begins at 8:30 a.m. and the hiring fair is set between 10:30 a.m. and 1:30 p.m. – News release


compiled by dave helms

An Ownership Transition Option Rediscovered

Founded in 1982, Huntsville-based Gleason Research Associates Inc. has built a specialized niche as a defense contractor in missile systems and engineering services. Over the years, the company has developed a strong reputation in the government contracting industry and employs about 140 workers, many with highly specialized skills.

But in the past few years, the company founders, physics Ph.D. Thomas Gleason and engineering Ph.D. Robert Yates, became ready to retire. By late 2012, Gleason had retired and Yates had passed away, and the company, owned by their families, continued to thrive. “The Yates and the Gleasons were not interested in running a company, but they were very concerned about the employees and their families and our contribution to the industry, ” says Chuck Vessels, president of GRA. 

After considering several methods for allowing the owner families to cash out of the business, Vessels decided that an employee stock ownership plan was the ideal option. Not only would an ESOP provide a way out for the owners, but also it would allow the company to maintain its culture and guarantee that employees’ jobs would stay local to Huntsville and the company’s other sites, rather than placing decisions into the hands of an out-of-town buyer. 

With the help of New York investment banking firm CSG Partners, along with a host of other advisors, Gleason Research converted ownership to an ESOP earlier this year. “Our culture has always been very much focused on employees and their families, ” Vessels says. “With an ESOP, we’re able to protect that and provide additional benefits to them as owners of the company.” 

Weighing the Options

Before deciding to take the ESOP route, GRA considered other ways to allow its owners to divest their investments. For instance, over several years, various investment bankers approached the company about potential mergers and acquisitions. “Dr. Gleason and Dr. Yates were satisfied with what they had done, but they were concerned about the culture of a potential acquirer, ” Vessels says. “We all knew people who had been at companies that were acquired, and we had a feeling we knew what was coming. Being engineers, we don’t like risks.” 

GRA leaders wanted to ensure their employees that their jobs would stay in their present locations and their company culture would remain constant. When one investment banker asked Vessels if he’d considered an ESOP, Vessels was sure it wasn’t the right answer. “Everything I’d heard was that ESOPs are confusing and nobody ever knew where the money was, ” he says. “The banker told me to get open-minded and learn about the new rules. After his presentation, I realized he’d given us the perfect answer to meet all our needs.” 

ESOPs have been around since 1974, but they have not been used as much in Alabama as in other parts of the country, says George Thacker, managing director at CSG Partners. Negative anecdotal evidence against ESOPs, such as what Vessels had heard, is fairly common — “if there’s only one ESOP in town and it wasn’t set up well, people think ESOPs are all bad, ” he says. “But you can’t confuse a strategy with company issues. For instance, I know hundreds of IPOs that haven’t gone well, but that doesn’t mean that an IPO is a bad strategy.” 

Currently, ESOPs have become increasingly more common in the government contracting industry, perhaps because merger and acquisition activity has slowed. “In the past 24 months, we’ve closed six ESOPs for government contracting companies, ” Thacker says. “For businesses that are dependent on highly capable or specialized talent, an ESOP can be an ideal scenario, because it provides talented employees with an equity stake in the business without them having to put up any money.” 

Making It Happen

An ESOP is essentially an additional retirement plan for employees, as well as an ownership vehicle that guarantees employee input in company decisions. When a company is 100 percent owned by an ESOP, and the ESOP is structured correctly, the company does not have to pay federal income taxes, says Thacker. The company then uses its tax-free cash flow to pay down its debts and to continue growth and hiring, boosting the local economy. 

To create the ESOP, Gleason Research relied on CSG Partners to bring together all the necessary parties — such as bankers, lawyers and appraisers — and handle negotiations. CSG located capital for the deal with bank financing and additional lenders. It also ran the transaction from beginning to end, Thacker says. 

The company put that cash into the ESOP, and the ESOP used the money to pay the owners and their families for their stakes in the company. Employees who are vested in the company receive shares of the ESOP, providing them an ownership stake that they can sell back to the ESOP upon retirement. While GRA is scheduled to pay off its loans for the ESOP within five years, Vessels is “convinced we will pay it off early, ” he says.

All About ESOPs

ESOPs began in 1974, and today, approximately 9, 000 privately held companies have implemented them. Investment banks that organize ESOPs say interest in the structure is increasing. 

“We’ve seen a trend over the past five to seven years, ” says George Thacker of CSG Partners. “The aging baby boomer demographics have really fueled a growth in owners looking at it as an option. In addition, higher income tax rates have dramatically increased the number of transactions, and, as people become more familiar with ESOPS, that’s another factor.” 

ESOPs in general are governed and regulated by the Department of Labor under the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code. 

“There is substantial compliance required to make sure employees are protected, ” Thacker says. “In addition, with Gleason and all of our transactions, there is a third party trust company that solely represents the interests of the employees.” 

As aging companies face growing pains and founding owners reach retirement age, they often look for ways to divest assets while protecting their employees. 

“When a company sells in a M&A, it risks changing culture, impact on employees and loss of jobs to the community, ” Thacker says. “But all across the United States, in big cities and small towns, ESOPs are being implemented, wherever there are companies facing the same issues.”

Nancy Mann Jackson and Dennis Keim are freelance contributors to Business Alabama. Both are based in Huntsville. 


Text by NANCY MANN JACKSON

The Pollinator

“See those bumblebees on the sunflowers?” Dr. George Koulianos asks underneath a blue sky near the southernmost tip of Alabama. “This is what I do for a living. Isn’t that cool?”

His voice is filled with genuine fascination and wonder at the pollination process and the unknowing role this tiny insect plays in the beautiful ritual. You’d never guess that Koulianos sees this fertility dance every day — thousands of times a year, actually. In fact, as the medical director for The Center for Reproductive Medicine in Mobile, he’s kind of like the dance’s choreographer.

In Theodore, between Mobile and Dauphin Island, Koulianos looks just as natural on his farm in a pair of jeans as he does at his office in a white lab coat. When he and his wife purchased this 11-acre property in 2012, it seemed like a harmless little venture. “I thought I was going to grow and sell hay and maybe have a little vegetable patch, ” Koulianos says with a knowing smile. “I didn’t think I’d be selling vegetables to farmer’s markets and to restaurants.”

The irony is not lost on him. In 1993, Dr. Koulianos founded the Center for Reproductive Medicine in partnership with Mobile Infirmary. Since then, the clinic has become the most comprehensive reproductive medicine program in the region, helping more than 3, 500 couples start families of their own. 

As for the farm? “It’s reproduction in a different way, ” he says. “The joke is that I’m ‘The Pollinator.’”

As the son of Greek immigrants growing up in Houston, Koulianos says medicine was less of a calling and more of a “telling.”

“From the age of 5, my parents told me I was going to be a doctor, ” he says. “Eventually, I bought in.”

But the path wasn’t always that clear. “My father died unexpectedly during my first year of medical school, so I had this decision to make. Stay in school to become a doctor or take over the family business?” 

After years in medical practice in Mobile, Dr. George Koulianos has turned his hobby farm into a sideline business.

 

He tried juggling both for a year, taking on the study load of medical school while carrying the workload of the family service station. “It was my character building time, ” he says succinctly. He eventually sold the business, got his father’s estate in order and dove into medical school headfirst. “I had to be a doctor at that point, because I felt like it was meant for me.”

He eventually found himself working at the University of South Alabama in Mobile, with dreams of becoming a department chair at a medical school in the Northeast or finding a job back in Houston. Then Mobile Infirmary came calling.

“They approached me with this vision of creating a regional fertility clinic that would put outcomes and service first and everything else second. They asked what I would need to start such a clinic, and I intentionally gave them this completely unrealistic list, ” he says. To his surprise, they agreed.

Today, the center is the regional leader in outcome, volume and breadth of experience. “When I started this program, my goal was to be the best and to treat everyone with the respect and dignity they deserve. Those are the ideals under which we operate.”

It’s hard to ignore the similarities between his day job and his hay job — particularly how they’ve both grown and evolved from the first seed of inspiration.

“The farm operation just keeps growing every year, ” Koulianos says proudly. In just four short years, he’s gone from handing out a few squash to his nurses at work to selling his produce to establishments like the trendy Noble South Restaurant in Mobile, a local champion of the farm-to-table movement. “People are now calling me wanting to know what I have and where they can get it!”

The vegetables grow in six long rows behind his red barn: zucchini, squash, green beans, cabbage, broccoli, cucumbers, garlic, asparagus and six tomato varieties (seeds for two of which he brings back from Greece every year). This year, to keep up with demand, he’s hired a farmhand who helps with a lot of the manual labor two days a week, and Koulianos himself breaks a weekly sweat on the farm. 

He cuts a cucumber off the vine, brandishes a pocketknife and methodically begins peeling off its skin. “Try this, ” he offers, slicing the raw vegetable into wedges. “This is the real deal.”

Koulianos uses no conventional pesticides on his farm, and he likes using organic fertilizers, including one with a local touch. “I put down tons of crab meal from Bayou La Batre, ” he says, “which is dried and crushed crab and shrimp shells.” 

He swears by the stuff — that is, if you can get past the smell. “Hardly anyone else puts crab meal down, because it costs about three times as much as regular fertilizer.”

On the subject of expense, Koulianos recognizes that he was in a fortunate position to get his farming venture to take root. “You have to have enough capital to do it up front, ” he explains. “Most people who start businesses are undercapitalized, and you probably need a year’s worth of money up front. I was lucky that I was able to do that.”

Although his retirement from medicine is on the horizon, Koulianos has no intention of curbing his vegetable production. “When I retire in about five years, it’ll probably be two or three times the size of this, ” he says, looking at his vegetable rows. And he’ll need every row he can fit. Whole Foods is the latest business to come calling, and he anticipates providing vegetables for the popular grocer next year.

“You know, my favorite part of this whole process is the planning, ” he says. “I spend weeks and weeks planning how I’m going to line everything up, what I’m going to grow, where I’m going to grow it. You have a whole production schedule. And the key to having success in the spring is what you did in the winter.” 

And believe it or not, sometimes his side-job makes his day job seem easy. “There’s more planning in farming than there is in my practice, ” he says. “For a patient, you plan maybe six months in advance. Here, I’m already planning what I’m going to do next year.”

Koulianos also says that the feedback from patients who have heard about his farming or purchased his vegetables at the farmer’s market has been overwhelmingly positive. “They love it, ” he says. “Patients want their doctors to be normal and to live balanced lives. I think they recognize that a doctor who’s practicing medicine all day and all night is more prone to make mistakes.”

And how long can he keep this up? “As long as I’m healthy. I mean look at these farmers! I see some of these guys plowing with their tractors, and they’re 80-plus. There’s a lot we could learn from people like that.”

Breck Pappas and Elizabeth Gelineau are freelance contributors to Business Alabama.  Both are based in Mobile, where Pappas is a staff writer for Mobile Bay Magazine.


Text by Breck Pappas • Photos by Elizabeth Gelineau

American Manufacturers Battle Chinese Scofflaws

When Business Alabama visited with him two years ago, Milton Magnus III was hanging in there — up to his neck fighting illegal imports from China with scant help from the U.S. government. 

The situation is better now, but Magnus expects conflict with the Chinese to continue. “The Chinese don’t play fair; they don’t play by the rules, ” says Magnus, president of Leeds-based M&B Hangers, which makes steel garment hangers for the dry cleaning and textile rental industries.

Begun in 1943, M&B Hangers was among a handful of leading American steel wire hanger manufacturers when illegal Chinese imports began in the United States around 2000.  The imported steel wire hangers, dumped at rock-bottom prices in violation of the World Trade Organization framework, put immediate pressure on M&B Hangers and other American manufacturers.

Within a few short years, M&B Hangers was the only domestic steel wire hanger manufacturer left standing and was itself on the brink of going out of business. So for almost 15 years now, Magnus has been in the middle of a fight to curb illegal Chinese imports of steel wire hangers. In more recent years, he and others have pushed for federal legislation in that arena.

Jeania Stoves, an M&B employee for 26 years now.

 

A major breakthrough came in February, when President Barack Obama signed the Trade Facilitation and Trade Enforcement Act. According to thehill.com, the legislation is an overhaul of U.S. Customs and Border Protection and “streamlines trade rules that aim to keep importers from skirting U.S. antidumping and countervailing duties” as well as addressing other issues.

The law includes provisions developed and proposed by the American Steel Wire Producers Association, an 86-member trade association that Magnus has served as president for the past two and a half years.

U.S. Customs and Border Protection (CBP) has been tasked with coming up with a plan to implement the new law. M&B Hangers — with companies that include Leggett and Platt, Nucor Steel, U.S. Steel and others — is working with CBP to ensure the law’s implementation is on target.

“We want to make sure what we’ve worked hard for is actually in the plan when it’s implemented, ” Magnus says. 

CBP’s plan for implementing the new law is due in August. Magnus hopes that the coalition of companies he is working with will develop a stronger, more transparent relationship with federal Customs personnel.

“We would like to see more transparency and accountability working with Customs, ” Magnus says. “We would like to have it where if we file an allegation, like we’ve done in the past with our reports, Customs immediately responds to us and tells us when progress is or isn’t being made. They could be pretty secretive in the past. We feel good about the new law, but we still want to see something happen.”

The frustration level for M&B Hangers and other American companies impacted by the illegal imports has been off the charts. It has been a cat-and-mouse game with the Chinese, and enforcement of trade laws has been lacking, Magnus says.

Ordered several years ago to cease illegal shipments of steel wire hangers to the U.S., China simply stopped shipping them directly and starting shipping through other countries. Since then, illegal imports from China have been shipped through Taiwan, Vietnam, Malaysia, Laos, Sri Lanka and Cambodia. “We’ve even had some coming in from the Dominican Republic, ” Magnus says.

Raw materials align M&B with big steel producers on some trade issues.

 

But finding that the Chinese are cheating and getting federal enforcement action have been two separate things. 

“It’s really frustrating, ” Magnus says. “It costs a lot of money to file a dumping case, and you have to be in dire shape before you can file a case and win it. And then you see that the enforcement has been spotty at best.”

Magnus says America’s perception of China has become more wary in the past 15 years. Shortly after the illegal Chinese imports began, former President George W. Bush was given the opportunity to impact the dispute by siding with M&B Hangers and other American companies. He — surprisingly, perhaps — declined. 

Since then, “I think the view of China has changed drastically, ” says Magnus. “(Washington) sees what the Chinese have done to American businesses, American manufacturing, and I think whether it had been a Republican or Democrat in the White House — at the time President Bush (was there) — wouldn’t have made a difference.

“It was pretty political, and to sacrifice a small industry to keep good ties with China was important at that time, and we were the scapegoats. But I think the national outlook on U.S. manufacturing and, basically, what China has done to our manufacturing is on the forefront of everyone’s mind.”

Magnus expects the Chinese to continue dodging the rules and illegally shipping wire hangers to the United States. He cites the imports, Chinese “knock-offs” and the SEC’s probe into accounting practices at China’s online giant Alibaba as examples of incorrigible rule-bending by the Chinese.

“They will always try to find ways to get around U.S. laws, ” he says. “I think it’s almost bred into the culture. It’s a cultural thing they have to change, and it doesn’t change quickly.”

Since last speaking with Business Alabama, Magnus has taken other steps to keep M&B Hangers competitive. “We’ve invested in robotics, ” he says. “They are not up and running yet, but they are being tested, so we can have more control over our products and be competitive with anybody in the world.

“We’ve made it clear to everybody in the plant here so nobody will be scared. This won’t affect anybody working here at the plant today. It might affect our hiring habits when somebody leaves. So, eventually, we might be making the same number of hangers with fewer jobs or more hangers with the same number of jobs.” 

Charlie Ingram and Cary Norton are freelance contributors to Business Alabama. Both are based in Birmingham.


Text by Charlie Ingram • Photos by Cary Norton

Top News Links: Monday, July 25

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First SLS hydrogen test tank welded together

NASA has just finished welding together the first fuel tank for America’s Space Launch System (SLS) deep space rocket currently under development – and Universe Today had an exclusive up close look at the liquid hydrogen test tank shortly after its birth as well as the first flight tank, during a tour of NASA’s New Orleans rocket manufacturing facility on Friday. – Universe Today

State unemployment rate holds at 6 percent

Alabama's June unemployment rate was 6 percent, the Alabama Department of Labor said Friday. June's was unchanged from May's revised rate of 6 percent and is below June 2015's rate of 6.1 percent. June's rate represents 130, 349 unemployed people, compared to 132, 019 in May and 130, 604 in June 2015. – WVTM

Auto parts supplier cited for unsafe working conditions

An Auburn auto supplier is facing $106, 200 in possible penalties after the federal government cited it for placing workers in conditions that could have lead to amputation or worse. The U.S. Department of Labor's Occupational Safety and Health Administration said both permanent and temporary workers at the Pyongsan facility could have been caught in machinery or hit by objects. – AL.com

Research suggests IT professionals should move around

Staying too long in one position can be a career hazard in some professions. According to recent research by Randstad, employees in Information Technology who remain with one company for an extended period of time may jeopardize their chances for success. – Good Call

Troy University students digging ancient Philistines

Students from Alabama's Troy University recently participated in an archaeological expedition that has shed new light on the origins of the Philistines, a race of people described in the Bible. The dig uncovered what is believed to have been a Philistine cemetery in the area of Ashkelon, a site near Tel Aviv in modern-day Israel. – AP/Dothan Eagle


compiled by dave helms

Top News Links: Friday, July 22

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Verizon, Adtran working together on fiber-optic internet

Verizon is looking to roll out the next-generation of fiber-optic internet for its FiOS communications network, and a Huntsville company has one of the approaches catching the eye of the telecommunications giant. Verizon is testing equipment from Huntsville-based ADTRAN, along with Swedish company Ericsson. – WAAY

Sanders Trust buys three rehab hospitals from MPT

A Birmingham real estate firm has bought three rehabilitation hospitals in a $111.5 million deal. The Sanders Trust announced it bought three hospitals from Medical Properties Trust, a Birmingham-based real estate investment trust. The three hospitals are all affiliated with HealthSouth, also based in Birmingham. – AL.com

City of Montgomery now in recycling business

The city of Montgomery has reached a deal to take over the shuttered $35 million recycling center that closed last fall. Montgomery signed an agreement Tuesday to acquire the Materials Recycling Facility and an adjacent lot from IREP for $625, 000 and other considerations, the city said in a release. – GovTech.com

Mike Tracy named CEO at Drummond Co.

The Drummond Company has new people at the helm. Mike Tracy, former President of Mining at Drummond, has been named CEO while Dr. Mike Drummond is the company's new chairman of the board. Dr. Drummond is the son of the late Garry Neil Drummond, former CEO and Chairman of the Board. – AL.com

UA wins $8M contract for mental health work

The University of Alabama School of Social Work and the Alabama Department of Mental Health have partnered on an $8 million project to expand a substance abuse and mental health program to underserved areas of West Alabama. – News release

Frontier Technologies expanding to Brewton

Frontier Technologies has purchased a 55, 530 square foot manufacturing facility in Brewton. The company manufactures aerospace, energy and architectural components and expects to create about 25 new jobs. The property sold for $600, 000, according to NAI Mobile, which represented the sellers. – News release

Education initiative leads to Whiz Kidz Lab

Led by an Airbus Group education initiative, the Mobile Airport Authority Foundation (MAAF) has opened Whiz Kidz Laboratory, a program designed to further STEM education along the Gulf Coast. – News release


compiled by dave helms

Top News Links: Thursday, July 21

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Polaris begins production at Limestone County plant

Polaris is now producing two vehicles at its brand new Huntsville-annexed Limestone County plant. Polaris chairman and CEO Scott Wine said the company began producing RANGERS in the beginning of June, while Polaris workers started assembling Slingshots in early July. The start of Huntsville production comes as the company works on belt-tightening measures based on what Wine calls 'a weaker retail sales environment.' – WAAY

Utz to pay $135 million for Golden Enterprises

Pennsylvania snack food company Utz Quality Foods will be acquiring one of Alabama's largest public companies, which the Utz CEO said would allow both companies to grow. Hanover-based Utz on Tuesday announced it would acquire Birmingham-based Golden Enterprises for $135 million, a deal expected to close in the fourth quarter. – BizJournals.com

State pledging $7 million for Walmart center

An incentive approval by the Mobile City Council has brought a two million-square-foot Walmart distribution facility closer to fruition. In addition to the $4.6 million from the city and county, the state of Alabama has pledged $7 million, according to the attorney for Mobile County Jay Ross, but hasn’t approved them yet. – Deli Market News

Takata recall cuts into Mercedes-Benz Q2 profits

Daimler reported weaker profit from its Mercedes-Benz Cars unit in the second quarter because of the cost of refreshing its lineup and one-time charges related to recalling cars with faulty Takata airbags. The profit margin at the Mercedes-Benz Cars division, which includes the Smart brand, dropped to 6.4 percent, compared with 10.5 percent last year, the automaker said today. – Automotive News

Sears home stores in Dothan, Selma to reopen

Sears Evolving to meet changing consumer needs and to embrace its nationwide branding as “America’s Appliance Experts, ” the refresh of three Sears Hometown and Outlet Stores in Alabama culminates with a grand reopening celebration today through Saturday at the locations in Dothan and Selma. – Globe Newswire

Pepsi sign controversy continues to fizz

When UAB got involved with the controversial sign on the Birmingham skyline, officials were told the company had all the permissions it needed, the University said in a statement. 84 Outdoor, a Pennsylvania advertising company, appealed a March decision made by the Birmingham Design Review Committee last week. – AL.com

RCP Companies adds $300 million Atlanta project

The same firm launching CityCentre at Big Spring and MidCity Huntsville just added another mixed-use development to its growing portfolio. RCP Companies announced this week it will open Jodeco Atlanta South, a $300 million project with Cabela's and a 12, 000-square-foot Mt. Olive Market food hall. – AL.com

Southern Union merger being ‘paused’

Those who struggled and fought against the merger of Southern Union State Community College with Chattahoochee Valley Community College and Central Alabama Community College did not break into cheers when it was announced the merger was being “paused” last Thursday afternoon. The merger is being postponed indefinitely. – Randolph Leader


compiled by dave helms

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