October 24, 2014

State unemployment rate up to 4.6% in September

Workforce-DevelopmentThe Iowa Workforce Development agency is reporting the state’s unemployment rate rose to 4.6 percent in September from 4.5 percent in August. IWD spokesperson Kerry Koonce isn’t surprised. “You’re seeing transition between summer and fall employment, so we’ll frequently see a little bit of bump this time of year,” Koonce says.

The U.S. unemployment rate dropped to 5.9 percent in September compared to 6.1 percent in August. The number of unemployed Iowans increased to 77,900 in September from 76,500 in August. There are roughly 3,000 more unemployed Iowans compared to a year ago.

Koonce says there was also an increase in the total number of working Iowans. “It jumped from 1,626,400 (in August) up to 1,629,700 (in September),” Koonce says. “That’s 33,000 higher than it was this time last year, so that’s still very strong improvement for the economy.”

Iowa’s construction sector added 1,600 jobs in September, following an “unexpected” loss of 1,200 jobs in August. Construction has added jobs in five of the last six months. Education and health services also added 1,300 jobs last month. “We did see some losses in trade and transportation (-1,000 jobs), with most of that in the transportation area,” Koonce says. “We also saw losses in leisure and hospitality (-1,600), which does tend to trend down this time of year.”

Employment in Iowa’s construction, health care, and finance sectors are at or near record levels, according to Koonce. Manufacturing trimmed 100 jobs last month, marking the fourth straight month that sector has cut employment in Iowa. “We saw large growth (in manufacturing) last year, so that’s just kind of leveling off,” Koonce says. Compared to one year ago, there are around 400 fewer jobs in Iowa’s manufacturing sector.

Senator Grassley says Burger King protestors have the wrong focus

Senator Chuck Grassley

Senator Chuck Grassley

A protest is planned this afternoon outside a Burger King in Des Moines, demonstrating against the company’s proposal to move its headquarters to Canada. The list of speakers at the 4 P.M. event includes the heads of two unions, a local teachers’ association and the Iowa Alliance for Retired Americans.

Iowa Senator Chuck Grassley says the protesters should be focusing their efforts elsewhere. “They ought to be demonstrating to Congress to change the corporate tax laws, reduce the corporate tax rate so we’re competitive,” Grassley says, “and at the same time, any organization is going to have to be able to compete in the United States and expand their business or they won’t be in business.”

Burger King, which has more than 75 Iowa restaurants, is planning to acquire a successful Canadian donut shop chain and would move the fast-food company’s headquarters from Miami to Toronto. Grassley, a Republican, says the move is understandable, given America’s tax structure. He say the U.S. corporate tax rate is 35-percent while states add another four-percent — for a total of 39-percent.

“We’ve got to reduce the corporate tax rate to at least what the international average is of about 23%,” Grassley says. “Think how uncompetitive we are at 39, get it down to 23 so we can compete.” Drug store chain Walgreens came under fire in August after its leaders announced they were considering a plan to move the corporate headquarters overseas.

In an interview with Radio Iowa in August, Grassley called the United States’ tax system “unpatriotic” as U.S.-based companies have a very hard time competing in the global marketplace. Burger King is the latest corporation to weigh such a move.

“It’s another example of several other companies that are trying to be internationally competitive and do it in a way that compensates for the biggest corporate tax rate in the entire industrialized world,” according to Grassley. A former chairman of the Senate Finance Committee, Grassley says U.S. corporations are storing up to two-trillion dollars in offshore accounts, money that could be used for “economic good” in the U.S.

 

Marion companies breaking ground for expansion

Construction is underway at the ELPLAST site.

Construction is underway at the ELPLAST site in Marion.

Two companies are scheduled to break ground on big projects this week in the eastern Iowa town of Marion. ELPLAST manufactures a brand of press to close zippers on flexible packaging, such as those used on a bag of shredded cheese.

ELPLAST, based in Poland, is opening its North American headquarters in Marion. Chad Rupert, president of ELPLAST America, told KCRG-TV that he lived in Chicago, but moved to Iowa when his wife accepted a job in Cedar Rapids.

“When we started looking for property (for ELPLAST), we looked in Cedar Rapids, Hiawatha, and Marion,” Rupert said. “To be honest the city of Marion, from a business perspective, was doing all the right things. They’re very cooperative and it was a pretty easy decision.”

ELPLAST will break ground Wednesday on a 33,000-square-foot facility in the new Marion Enterprise Center, located off Highway 151 just east of town. Rupert anticipates the first phase of the project will create 30 to 35 jobs, but the operation could grow to as many to 80 jobs.

Legacy Manufacturing is also moving into the Marion Enterprise Center. The longtime Marion company makes lubrication equipment, water and air hoses, and other products. Mark Weems, President of Legacy Manufacturing, says they’re building a $10.4 million facility that will more than double their current space.

The hope is that the new building will allow them to make more parts for their products, rather than getting them from overseas. “This facility is critical because it will give us the space to bring American manufacturing jobs back to Marion, Iowa,” Weems said. Legacy plans to break ground on the 125,000-square-foot building late this afternoon.

The Marion Enterprise Center is a 180 acre industrial park. Legacy Manufacturing and ELPLAST are the first two tenants. There are still approximately 150 acres for sale at the industrial park.

By Heather Hubbs, KCRG-TV

 

Neighbors harvest beans for family of man who died in farm accident

Friends and neighbors harvested the crops on Gene Sitzmann's farm.

Friends and neighbors harvested the crops on Gene Sitzmann’s farm near Merrill.

A northwest Iowa farmer died Friday evening in a combine accident on a gravel road and the next morning over three dozen of his neighbors showed up for work in Gene Sitzmann’s field. Neighbor Chuck Kellen of Le Mars helped organize the “harvest bee.”

“A lot of friends, a lot of close friends of Gene’s heard about it, started calling me and my brother Bruce and we just got it coordinated as quick as we could just to help out the family in a time of need,” Kellen said. “It’s kind of what neighbors are all about.”

Nearly 40 people gathered in a field about a mile east of Merrill and, within three hours, they’d harvested 200 acres of soybeans.

“We had eight combines, six dump carts and, oh gee, 10-12 trucks and a lot of individuals helping out,” Kellen said.

The same group of neighbors is laying plans for a similar gathering to harvest Sitzmann’s corn. Sitzmann was 55 years old. Authorities say it appears he was pulling a trailer behind his combine. The trailer, which was carrying a soybean head for the combine, broke loose, hit the combine and sent the machine into a ditch. Sitzmann was thrown from the combine’s cab. He was taken to a Sioux City hospital, where he died from his injuries.

(Reporting by Dennis Morrice, KLEM, Le Mars/Photo courtesy of KLEM)

State gives economic development incentives to Sioux City, Ankeny, Dubuque

IDEDThe Iowa Economic Development Authority (IEDA) board today approved state incentives for a food plant, an insurance firm and a railcar maintenance facility. IEDA spokesperson, Tina Hoffman, says the railcar facility will be built in western Iowa.

“Trinity Industries is going to be building a new facility in Sioux City and creating 250 jobs as part of that. This project has a capital investment $29.5 million,” Hoffman says. “They will have an operating facility to do railcar maintenance, to do railcar remanufacturing there have been some new regulations that have gone into effect that really are demanding a reworking of railcars. So, that’s and industry need and this is a great project for Sioux City.”

The company won an award that is specific to cities on Iowa’s borders. “We actually have 5 around the state that are able to use this program, and over the course of the next 8 years as these jobs are created by Trinity Rail, they could receive $1.9 million, based on the jobs that are created,” Hoffman explains.

The program involves the taxes paid by the new workers, as Hoffman says the withholding taxes of the new employees at the company are diverted back to the company as the new jobs are created. The company says 160 of the new jobs will pay around $17 an hour.

Another award went to an eastern Iowa company for insurance services. “Kunkel and Associates is an insurance consulting firm that is going to do a project in Dubuque. It will be an expansion for them and will have a capital investment of $2.4 million, and will create 18 new jobs,” Hoffman says.

The board awarded them a $128,000 half-loan, half-forgiveable loan under what’s called the “High Quality Jobs Program,” along with some tax credits. The company promises to create at least 16 jobs of the 18 which will pay more than $20 an-hour.

Mrs. Clark’s Foods in Ankeny also won state incentives today. “This is a $7.3 million project that would add an additional 69,000 square feet for warehousing and refrigeration. The board awarded them tax benefits through the high-quality jobs program and that will help them create 13 new jobs,” Hoffman says.

The jobs will pay $25.52 an hour. Mrs. Clark’s Foods makes fruit and vegetable juices, salad dressings and other sauces.

 

Gas prices drop below $3 in most parts of the state

Gas-pumpDropping oil prices are partly responsible for a drop of prices at the gas pump. Department of Agriculture analyst, Harold Hommes, says a lot of the state is seeing gas for under three bucks a gallon. “Right now we’re finding things are fairly varied. We do have some in the low three’s yet, but most of the gasoline has crossed the $3.00 mark and has fallen into that two-70 to two-90 mark,” Hommes says.

He expects prices to continue to drop. “I do look for that trend to continue, there’s a lot of downward pressure right now on crude right now from the general economy, and recently, European recession woes,” Hommes says. He says one of the biggest factors is the substantial build up of crude oil stores. “We are producing a lot of it, and most storage hubs are sitting on ample supplies and inventories.”

Switches in production to produce heating oil can make the price go up, but Hommes says that’s no long a factor. “The heating fuel production, it’s really already occurred. And I think the industry is ready to move that and has been moving it through pipelines. It’s pretty much placed where it needs to be placed for this winter,” Hommes says.

Gas-PumpWhile the gas in your area may be under the $3.00, others may still be paying much more. Hommes says there can be wide variations on price, and sale philosophy and location are a couple of keys for the differences. “Some retailers have a bit wider margins. Some focus on narrower margins to attract customers in for other products,” Hommes explains. “But maybe the single biggest factor is location. When you’ve got to drive more than an hour to get your product from a terminal, those costs add up.”

He says competition can also be a factor in gas pricing. “And in most places in Iowa we do have that competition,” Hommes says. He says when there are a lot of stations in one area, it is hard to not match a station that drops its gas price, as customers can quickly move to the lowest priced station. Crude oil prices dropped nearly $6 or more this week — leading to the drop in gasoline prices.

The Triple-A average price for regular unleaded gasoline in Iowa Tuesday was $3.03. That is down nine cents from last week and down 25 cents from one year ago.

 

Winnebago reports increase in quarterly sales

WinnebagoQuarterly sales surged for Winnebago Industries as the Forest City-based RV maker reports a 22-percent jump in net income to nearly $13 million and delivering more than 700 motorhomes above the same quarter last year.

Net income for the fiscal year grew 41-percent to $45 million. Winnebago CEO Randy Potts says the company is seeing success after the impact of the recession. Potts says the company will be most effective and efficient if it can grow the business at a measured and predictable rate. He says he wants to continue to grow the company beyond where it is now, but to do it profitably and effectively, it’s best done if there’s a gradual increase.

Pottsthinks the market is settling into that pattern. Potts says with the market increasing in size slowly, the company getting a bigger piece of the market is what’s going to create sustained growth. Potts says the demand continues to be up for the company’s motorhomes as well as towable units.

“The towable market fully recovered to pre-recessionary levels, be we still have for Winnebago specifically, we still have great opportunity in the towable market because we just go into it. On the motorized side, that market is still below prerecession levels and likely still in a recovery mode,” Potts says.

Potts says the company’s motorhome backlog fell about 44-percent during the quarter as production rates rose. He says backlog is watched, as it’s an indicator of the strength of your business. He says the company has stated in the past that too much backlog is a bad thing since it means you’re not filling your orders in a timely manner, while not enough backlog is also a bad thing.

Potts says the company is right now in a “sweet spot” with its backlog level, being able to fill backlogs in a reasonable amount of time. The company’s board of directors this week approved the reinstatement of a quarterly cash dividend of 9 cents per share to holders of common stock.

Potts says it signals the company expects stability and growth in the business going forward. He says you don’t want to declare a dividend if you can’t sustain it, so that’s the message it sends to the stockholders. He says coming through the recession and recovering, with Winnebago outperforming the RV industry as a whole, gives the company the confidence to reinstate the dividend.

Data from the Recreation Vehicle Industry Association shows motorhome shipments in the third quarter of 2014 reached the highest level since 2007.

(Reporting by Bob Fisher, KRIB, Mason City)