May 22, 2015

Georgetown steel plant to close, costing more than 200 jobs

ArcellorMittal plant in 2007 (Image: Matthew Baugh/Wikipedia)

ArcellorMittal plant in 2007 (Image: Matthew Baugh/Wikipedia)

A steel plant that has been a fixture in the center of Georgetown for decades will close its doors for good this summer.

Luxembourg-based ArcellorMittal announced Thursday that it has given the required 90 days notice that it will close the Georgetown wire rod facility in the third quarter of this year. The closure will impact 226 jobs, the company says.

The company’s CEO blamed “unfairly traded steel imports” from China and other countries as one of the reasons for the plant’s closure, saying the cheap Chinese steel undercuts their own business. ““Despite our joint efforts and a highly productive workforce, the facility has incurred significant losses… due to high input costs and imports,” ArcelorMittal Long Carbon North America CEO P.S. Venkat said in a statement. “Georgetown is a very productive plant, making 300,000 tons of product per year with fewer than 200 full-time ArcelorMittal employees — that’s about 1,500 tons per worker. Imports have really been damaging to the Georgetown facility, and the business overall.”

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Landing Volvo project involves at least $200 million in incentives

Image: Volvo

Image: Volvo

Swedish automaker Volvo Cars said it chose the Lowcountry for its new auto plant because of access to an international port, a well-trained labor force and the region’s experience in the high-tech manufacturing sector.

But it almost certainly helped that the state and other entities offered nearly $205 million in economic incentives for land prep, infrastructure work, and tax credits at the Berkeley County site. The county is contributing another $11 million.

State Commerce Secretary Bobby Hitt said Monday that the majority of the package promised to Volvo would be raised through $120 million in economic development bonds. “This particular act was created specifically… for the type of project that comes along when the Department of Commerce needs something that’s slightly out of its appropriated grasp,” he told reporters Monday. “And this project is exactly that way.”

The bonds package would need to be approved by the Joint Bond Review Committee and the Budget and Control Board. Hitt said he expected the proposal to be submitted next month.

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Volvo announcement raises South Carolina’s global status

Image: Volvo

Image: Volvo

The newly-announced plans by Swedish automaker Volvo Cars to build its first Western Hemisphere plant in Berkley County raises the state’s worldwide image and will likely have a much larger impact than the 4,000 jobs first announced, according to an economist whose research focuses on business impact.

University of South Carolina research economist Joey Von Nessen told South Carolina Radio Network Monday that the new plant will raise the stakes for the state. “South Carolina has become more globally competitive in manufacturing… People notice, investors notice, other companies looking to relocate notice,” Von Nessen said.

Volvo Cars currently only has plants in Europe and China. While the company is headquartered in Sweden, it is a wholly-owned subsidiary of a Chinese auto manufacturer Geely.

State officials touted the announcement as the latest sign that South Carolina’s recent manufacturing boom is not subsiding.

“The transformation of South Carolina into advanced manufacturing has just been an incredible change that continues at a remarkable pace,” state Commerce Secretary Bobby Hitt said. “And we’re very lucky to have that.”

Von Nessen said Volvo Cars will also benefit from a supply chain that already operates in the region due to existing BMW and Mercedes plants in Greer and Ladson, respectively. “Because we have such a well-established automotive cluster in our state that means we have not only major auto manufacturers, but we also have an extensive chain,” Von Nessen said.

He said the plant will be an economic engine for the entire state. “They have the opportunity to purchase a number of their inputs and supplies from companies right here in South Carolina. So all those dollars stay local, they stay in our state.” He said that will have an economic trickledown effect.

Volvo hopes its $500 million facility will eventually create 2,000 jobs over the next decade, and up to 4,000 positions by 2030. The company said construction on the plant will begin this fall, with the first vehicles expected to roll off the assembly line in 2018.

Volvo chooses South Carolina for new auto plant

Gov. Nikki Haley touted Monday's announcement during a press conference at the Governor's Mansion. Commerce Secretary Bobby Hitt stands to her right

Gov. Nikki Haley touted Monday’s announcement during a press conference at the Governor’s Mansion. Commerce Secretary Bobby Hitt stands to her right

Volvo has chosen South Carolina as the site for its first-ever plant in the United States. The company released the information on its website Monday, not long after reports surfaced that Georgia had lost its bid for the site.

The $500 million facility in Berkeley County, Volvo’s first in the Western Hemisphere, will create up to 2,000 jobs by 2020, the company said. The plant will be built at the old Camp Hall timber plantation off Interstate 26 near Ridgeville. The site is about 40 miles northwest of downtown Charleston.

“What they wanted to see was a state that was going to care about the business atmosphere,” Gov. Nikki Haley said shortly after the announcement. “But, more than that, a state that was going to have a relationship (with them). Because they wanted to be made in America.”

Volvo says construction on the plant will begin in early autumn. The first vehicles are expected to roll off the assembly line in 2018. Volvo hopes the plant will produce 100,000 cars per year and employ 4,000 total workers once it is fully operational by 2030.

The Swedish company (although Volvo Car is a subsidiary of the Chinese auto manufacturer Geely) has not yet specifically identified which models will be produced at the site, other than that it will assemble the “latest generation Volvo models” for sale in the U.S. and for export to other markets.

Volvo said it chose Berkeley County because of access to an international port, a well-trained labor force, an attractive investment environment and experience in the high-tech manufacturing sector.

South Carolina Commerce Secretary Bobby Hitt said his agency lined up roughly $150 million in incentives to lure Volvo, including plans to borrow much economic-development bonds. That money must be approved by a legislative bond review committee and the state Budget and Control Board.

Hitt said the money would go towards land preparation, infrastructure, and job training. “The transformation of South Carolina into advanced manufacturing has just been an incredible change that continues at a remarkable pace,” he said during Monday’s press conference. “And we’re very lucky to have that.” A Commerce spokeswoman said some of the money would be needed to bring rail to the 6,800-acre site.

The Commerce Department also can offer funds from its existing Deal Closing Fund, site improvements grants through the state Coordinating Council for Economic Development; and offer Volvo tax credits for total jobs created.

Volvo had rejected a site near Savannah in Georgia, the final state competing with South Carolina for the plant. The Atlanta Journal-Constitution reported that news last week, sparking rumors that an announcement was imminent for the Palmetto State.


Lowcountry designated as a “Promise Zone” by the U.S. Department of Housing and Urban Development

A rural swath of the Lowcountry has been designated as a “Promise Zone” by the U.S. Department of Housing and Urban Development (HUD).

U.S. Department of Housing and Urban Development image.

U.S. Department of Housing and Urban Development image.

The plan allows trained federal workers to help affected counties apply for grants, particularly for applications submitted towards education, jobs, and low-income housing. HUD Secretary Julian Castro announced the new Promise Zones in a press conference Tuesday.

The US Department of Agriculture’s State Director for Rural South Carolina Vernita Dore told South Carolina Radio Network that the program also works on increasing public/private partnerships. “It’s an opportunity for communities to work together with local leaders to increase economic opportunities and educational opportunities, to leverage private investment, enhance public health and other priorities indicated by the communities.”

The designation gives impoverished areas of the communities a leg up in obtaining grants and other federal assistance, she said. “It’s a big collaborative effort between, or among, private businesses, federal, state, local officials, faith based, non-profits and communities with all of them working together,” Dore said.

The Lowcountry Promise Zone community is one of eight selected from 123 applications from 36 states, Puerto Rico and Washington, DC. Each urban, rural, and tribal Promise Zone applicant was asked to put together a clear description of how the Promise Zone designation would accelerate and strengthen the community’s own efforts at comprehensive community revitalization. Each Promise Zone will be coordinated by a lead community based organization in partnership with the Obama Administration.

The other Promise Zones announced Tuesday include Camden, New Jersey; Hartford, Connecticut; Indianapolis, Minneapolis, Sacramento, California; and the Pine Ridge Indian Reservation.

The Southern Carolina Regional Development Alliance, an economic development entity that covers the region, will oversee the program. More than 90,000 people live in the affected areas of Allendale, Bamberg, Barnwell, Colleton, Hampton and Jasper counties.

Partners with the Lowcountry include: Promise Zone included: South Carolina Housing Authority; South Carolina Department of Commerce; Electric Cooperatives of South Carolina; South Carolina Department of Agriculture; South Carolina Victim’s Assistance Network; GrowFoods Carolina; Palmetto Project; and the Lowcountry Council of Governments.

A release sent by HUD on Tuesday said Southern Carolina would work on strategies to expand local and regional food systems and the agricultural sector to create new job opportunities, as well as create a revolving loan fund to help enable private investment in community development.