Bottom Line: GE CEO Steps Down; Southwest, Allegiant Add Flights From Louisville Friday, Jun 23 2017 

On this week’s edition of “Bottom Line,” Shea Van Hoy, managing editor of Business First, joins us to discuss the departure of GE CEO Chip Blankenship, Churchill Downs’ $60 million investment and the good news for people traveling from Louisville. Listen in the player above.

Here are the stories we’re discussing this week, from Business First:

GE Appliances names new CEO; Blankenship leaving company — EXCLUSIVE INTERVIEW

Churchill Downs to spend $60M on new gaming facility in Louisville

EXCLUSIVE: Southwest Airlines adds new flight destination from Louisville

Allegiant will add another Louisville flight this year

Ford To Invest $900 Million In Louisville Plant Tuesday, Jun 20 2017 

The Ford Motor Company says it plans to invest $900 million in its Kentucky Truck Plant in Louisville to make the new, aluminum-sided Ford Expedition and Lincoln Navigator SUVs.

The vehicles will go on sale this fall and will be exported to more than 55 markets globally.

The company says the investment will secure 1,000 jobs at the Kentucky Truck Plant, which has about 7,600 total full-time workers.

Plans for Focus production have bounced around over the last few months as Ford tries to squeeze some profits from the ailing small car segment. U.S. Focus sales were down 20 percent through May, hurt by low gas prices and consumer preference for SUVs.

In January, the company announced it would cancel a new plant in Mexico and instead use capacity at another plant in Mexico to build the Focus.

Ford’s president of global operations, Joe Hinrichs, said over the last few months, the company decided it could save another $500 million in tooling and other manufacturing costs if it moved production to China.

Game Changer? Sports Complex Proposed For Heritage West Monday, Jun 19 2017 

The Louisville Urban League wants athletics to be a part of the West End’s economic future.

Louisvillians were given a peek on Monday night at proposals for Heritage West, the previously proposed site of the West Louisville FoodPort.

One of those proposals — introduced by the Urban League — is for a sports complex. It would include an indoor track and field facility, retail space and restaurants and cafes.

Take a look:

Louisville Urban League

A slide from the Louisville Urban League’s Monday night presentation.

Sadiqa Reynolds, president of the Louisville Urban League, said the project is about more than just sports.

“You’re talking about people moving in and out of the community,” Reynolds said. “Even more, this is about economic impact. The idea that you would bring this kind of facility into this part of the city and then we would then be able to compete on a regional level.”

Reynolds said the $30 million project would generate revenue from organizations such as the NCAA and the Indianapolis-based USA Track & Field organization.

“So just from a track and field perspective, you’re talking 30,000 to 40,000 visitors to our city,” said Reynolds. “They will have to have hotels, they will eat, they will do all the things people do.”

Approximately 24 million people visit the city annually, according to the Louisville Convention and Visitors Bureau. The city is also within a day’s drive for about half of the population of the U.S. That distance, Reynolds said, is important for track teams who want to compete and travel by car.

The proposed sports complex is minutes away from the Kentucky International Convention Center, which is being renovated, as well as the new Omni Hotel, both projected to open in 2018.

Louisville Urban League

In a slideshow presentation, the Urban League laid out plans for financing the $30 million complex.

Besides the potential big money the venue could bring to the city, Reynolds said the elite athletes competing at the facility would provide a positive image for children in West Louisville.

“Our kids need to see some heroes up close, gathered in one location, and this is going to do that,” she said.

The Heritage West site is located at 30th Street and Muhammad Ali Boulevard. The West Louisville FoodPort would’ve occupied its 24 acres, but the plan fell through last August after an anchor tenant backed out.

The development was intended to boost economic activity and bring hundreds of new jobs to West Louisville. Reynolds said after plans fell through, she wanted to come up with something that would help the neighborhood.

“After that FoodPort didn’t happen, I just wanted to think of something that the community could buy-in, that the people could support — people with dollars could support — and that would change the way West Louisville operates and is seen,” she said.

In October 2016, Walmart canceled plans to build a new superstore at 18th and Broadway. The $30 million project was expected to bring 300 new jobs to West Louisville and have an annual payroll of $6 million.

Louisville Urban League

A slide from the Louisville Urban League’s presentation on their proposal for Heritage West.

Two months later, some good news finally broke for West Louisville.

In early December, the city received a $30 million federal grant from Housing and Urban Development to revitalize Russell. Good news continued this spring when in April, officials announced plans for a new 62,000-square-foot building at the corner of Broadway and 18th Street.

And less than a week later, Passport Health Plan announced their plans to relocate to the former Walmart site.

Other proposals for Heritage West include a food cooperative and a research park modeled after one in Durham, North Carolina.

The Louisville Urban League’s sports complex proposal would take 18-24 months to build and would open in 2020, Reynolds said.

However, she said the time for athletics to be a part of the West End’s economic future is now.

“This is the time. You know how you just feel like I got this one shot, I feel like this is the one shot, let’s get the momentum behind it,” she said.

After The Amazon Deal: What Will Shopping At Whole Foods Feel Like? Sunday, Jun 18 2017 

When the news broke that Amazon had agreed to buy Whole Foods for $13.7 billion, the retail food sector went a little bananas.

The stock prices of large food retail chains, such as Costco, tumbled a bit.

And this headline from Business Insider helps explain it: Amazon is acquiring Whole Foods — and Walmart, Target, and Kroger should be terrified.

The message is this: The brick-and-mortar retail business that pioneered organic, fresh food and the country’s dominant e-commerce company make a powerful combination.

Whole Foods was quick to point out, in a statement, that its stores will continue to operate under the Whole Foods Market brand, that its headquarters will remain in Austin, Texas, and that John Mackey will stay on as CEO.

Nonetheless, a lot is about to change. We spoke to food analyst David Portalatin of the NPD Group, a market research company.

A Moody’s analyst described the Amazon-Whole Foods deal as a “transformative transaction, not just for food retail, but for retail in general.” Do you agree?

Yes. The world’s largest e-commerce company is now a very substantial brick-and-mortar food retailer. I think ultimately, this is good for consumers.

Why?

Convenience. More of our shopping visits are digitally enabled, and this is going to continue to grow. Increasingly, we’ll be doing everything from home.

Take the restaurant sector, where customer traffic is flat, digital orders are up 45 percent over the last two years. So when you give consumers the flexibility and power to procure the goods they want, and have them delivered straight to their front door, that’s a winning proposition.

Americans have been slowly moving toward online grocery shopping. But there have been challenges. For example, when it comes to buying fresh food, we like to feel, see and touch the fruits and vegetables we’re buying. At least, I do! Has that been a problem for Amazon?

Fresh foods are the final frontier for Amazon. And figuring out how to get it to your front door is the ultimate inconvenience for consumers. In order for Amazon to get the volume growth they are looking for, fresh foods has to be part of the equation. This deal gives Amazon a major foothold in that space. Whole Foods gives Amazon a tremendous amount of credibility around the quality of the food and the reputation they have with their customer base.

Especially among millennials, is that right? You point out that 24 percent of millennials bought something from Whole Foods last year.

Yes. That’s an extraordinary penetration for a supermarket chain with just 431 stores. The deal now gives Amazon control of those 431 stores, nearly all of which are in neighborhoods that are more affluent and younger than America as a whole. Those stores solve much of Amazon’s “last mile” delivery challenge for fresh groceries.

What do you think it will be like to walk into a Whole Foods 10 years from now? Will we just be stopping by to pick up what we ordered online?

I think it’s going to look a lot different than it looks today, for sure. The stores will evolve to become more experiential. The stores could teach cooking skills, hold classes and educate about food. There could be all kinds of initiatives to repurpose the brick-and-mortar store.

There’s also the “grocerant” trend — a blending of grocery stores and restaurants. Whole Foods already has a lot of in-store dining and lots of prepared foods.

Yes, we’ll continue to see prepared foods in demand. Tonight, 1 in 10 entrees served in Americans’ homes will be a “prepared, ready-to-eat” item purchased outside the home. Again, it’s about convenience.

Copyright 2017 NPR. To see more, visit http://www.npr.org/.

Amazon Says It Will Buy Whole Foods In $13.7 Billion Deal Friday, Jun 16 2017 

Amazon is buying Whole Foods, in a merger that values Whole Foods stock at $42 a share — a premium over the price of around $33 at the close of trading on Thursday. The Internet retailer says it’s buying the brick-and-mortar fixture in a deal that’s valued at $13.7 billion.

Whole Foods, which opened its first store in Austin, Texas, back in 1980, now has 465 stores in North America and the U.K.

Amazon says that Whole Foods’ CEO, co-founder John Mackey, will remain in that role, and that the grocer’s headquarters will still be in Austin.

“Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decades,” said Jeff Bezos, Amazon founder and CEO, adding, “they’re doing an amazing job and we want that to continue.”

The sale, which has not yet been approved by Whole Foods shareholders, is expected to be concluded in the second half of 2017.

In its news release, Amazon says that Whole Foods stores will continue to operate under their own brand and will continue to source products “from trusted vendors and partners around the world.”

The most recent earnings report for Whole Foods came out in May. At the time, Mackey said, “Our business is strong with record revenue of $15.7 billion, and over $1 billion in operating cash flow in 2016.”

But Mackey also said, “the operating environment remains challenging,” and he promised to enact changes at the company to keep it competitive and profitable.

In April, activist investor Jana Partners announced it had bought nearly 9 percent of Whole Foods’ stock and was reportedly hoping the grocer would make changes to boost its value.

Mackey called his new investors at Jana Partners “greedy bastards,” in an interview that the Texas Monthly published earlier this week.

“These people, they just want to sell Whole Foods Market and make hundreds of millions of dollars, and they have to know that I’m going to resist that,” Mackey told Texas Monthly. “That’s my baby. I’m going to protect my kid, and they’ve got to knock Daddy out if they want to take it over.”

Copyright 2017 NPR. To see more, visit http://www.npr.org/.

Bottom Line: A Look At Big Business Stories In Louisville This Week Thursday, Jun 15 2017 

Each week on the “Bottom Line,” Business First Managing Editor Shea Van Hoy joins us to discuss some of the top Louisville business stories of the week.

Here are the stories we’re talking about this week, from Business First:

What’s the refrigerator downloading now? GE Appliances CEO talks appliance connectivity

How the Kentucky Science Center is pushing creative development (PHOTOS)

EXCLUSIVE: Louisville brewery is tripling its footprint

Announcing: 2017 Forty Under 40 honorees

Listen to this week’s business roundup in the player above.

Current Events: Trump Floats Changes To Ohio River Infrastructure Monday, Jun 12 2017 

When President Trump picked the Ohio Valley as the setting to promote his infrastructure plan, he also drew attention to an overlooked part of the nation’s transportation system: inland waterways. Agriculture, energy, and manufacturing interests all depend heavily on the Ohio’s aging navigation system.

The president’s speech in Cincinnati cheered many industry leaders who have long been frustrated by costly delays caused by failing locks and dams on the river. But some of the Trump administration’s ideas for changing how the country plans and pays for waterways projects have raised concerns among infrastructure experts.

img_4921-erwin-creditNicole Erwin | Ohio Valley ReSource

Olmsted is a multi-billion dollar fix for the Ohio, decades in the making.

Costly Construction

In western Kentucky, not far from where the Ohio joins the Mississippi, work is underway on the most expensive inland waterway project in U.S. history. The Olmsted Locks and Dam will replace two aging structures upstream where breakdowns create a bottleneck on the flow of barges. Army Corps of Engineers Colonel Christopher Beck said Olmsted is one of the busiest locations on the inland waterways.

“We pass about 90 million tons of cargo through here every year,” Beck said. “So it’s critical to both this region, to industry and the nation.”

By the time it’s complete in 2022, the project will be nearly 30 years in the making and with a total price tag of a little under $3 billion.

President Trump wants to change how the country goes about building big projects like Olmsted, with fewer regulatory restrictions on the permitting process and more private capital investment in place of federal tax dollars.

About 500 miles upstream of Olmsted, Trump stood on the Ohio’s banks in Cincinnati to speak about the nation’s infrastructure. With coal barges as a backdrop, the president said businesses and jobs depend on infrastructure that is in dire condition.

“These critical corridors of commerce depend on a dilapidated system of locks and dams that is more than half a century old,” Trump said. “And their condition, as you know better than anybody, is in very, very bad shape. It continues to decay.”

Mixed Reactions

Mike Toohey was excited to hear President Trump talking about the river system. Toohey is President of the Waterways Council, an organization advocating for inland waterways infrastructure.

“It’s the first time in my career that I’ve heard a president talk about the need to invest in our waterways and how important they are to our national economy,” Toohey said.

3636457686_c712130bb6_zUS Army Corps of Engineers

A closeup view of the wickets of Dam 52 near Paducah, Kentucky.

The president’s speech was light on specifics and the administration has not yet delivered any detailed infrastructure plan. But a White House fact sheet outlined plans for “establishing a fee to increase the amount paid by commercial navigation users of inland waterways.”

Toohey is a bit skeptical of this approach, especially if tolling is implemented. He said waterway users already contribute to the costs of building river infrastructure through a tax on diesel fuel that goes to the Inland Waterways Trust Fund. Toohey warned that increased fees could drive commerce away from waterways and toward rails and highways, disrupting long term business decisions based on affordable river transport of goods.

“Customers will exercise their choice to always pursue the low cost option,” he said. “They will go to competitors of those businesses that are on the waterways, because they don’t have to pay any tolls and they’ll buy their commodities there.”

Alexandra Kanik | Ohio Valley ReSource

P3 Approach

The White House fact sheet on infrastructure also emphasizes private investment as a key principle.

“The private sector can provide valuable benefits for the delivery of infrastructure,” according to the document, which promoted public-private partnerships as a way to “help advance the nation’s most important, regionally significant projects.”

Public-private partnerships, sometimes called P3s, are not widely used for infrastructure funding in the U.S. and have a mixed record when they are. 

Steve Ellis, vice president of the non-profit budget watchdog group Taxpayers for Common Sense, said private sector interests don’t always line up with public needs. He said there is an inherent tension between the private sector’s desire to get a return on investment and the public’s desire to keep services affordable, and warns that P3s carry risks for the public.

“You know, a large percentage of them actually fail,” Ellis said. “And then the federal taxpayer or the state taxpayer in many of these cases is on the hook to actually fund the rest of the project or pick up the pieces where they left off.”

Jeff Young | Ohio Valley ReSource

A coal barge on the Ohio in Louisville.

Rollbacks on the River

Trump also pledged to roll back regulations associated with the permitting of infrastructure projects.

“We’re getting rid of the regulations and we’re massively streamlining the permitting and approvals process,” Trump said in his speech in Cincinnati.  

A White House web page on infrastructure sets a goal to “dramatically reduce permitting time for these infrastructure projects from 10 years to 2 years…by slashing regulations.”

But taxpayer watchdog Ellis warned that those regulations can play an important role in making sure tax dollars are spent wisely.

“Sometimes some of those regulations and hoops lead to us not building a bad project or wasting taxpayer money,” Ellis said.

Ellis called Olmsted the “poster child” of overdue and over-budget projects — one that should serve as a cautionary tale. He and others will be watching to see if those lessons are heeded as the president pushes for $1 trillion in infrastructure investment.

Other Infrastructure Needs

A recent report card from the American Society of Civil Engineers gave the country’s infrastructure a near failing grade of “D+” for shortcomings in water, transport, and public safety. The Ohio Valley is no exception, where the ASCE identified billions of dollars in needed investment in drinking water and wastewater systems, improvements to structurally deficient bridges, and numerous high-hazard dams.

The graphics below are based on the ASCE report on infrastructure in Kentucky, Ohio, and West Virginia.

Alexandra Kanik | Ohio Valley ReSource
Alexandra Kanik | Ohio Valley ReSource
Alexandra Kanik | Ohio Valley ReSource

Amazon Lowers Prime Membership Rate For Low-Income Customers Wednesday, Jun 7 2017 

Amazon is attemptING to lure low-income shoppers from Walmart by offering a discount on its pay-by-month Prime membership for people who receive government assistance.

The typical Prime membership is $99 a year, but those who cannot afford to pay up front also have the option to pay $10.99 a month.

The giant online retailer said on Tuesday that people who have a valid Electronic Benefits Transfer card, used for programs such as the Supplemental Nutrition Assistance Programs, or food stamps, will pay $5.99 per month.

Amazon Prime benefits include free shipping, unlimited streaming of movies and TV shows and a rotating selection of free e-books and magazines.

Amazon is offering a 30-day free trail for qualifying customers.

Reuters reports:

“The online retailer’s move directly challenges Walmart — the biggest beneficiary of the Supplemental Nutrition Assistance Program (SNAP) — where at least one in five customers pay by food stamps.”

The Wall Street Journal adds:

“Walmart generated about $13 billion in sales last year from shoppers using the SNAP Program, accounting for around 18 percent of the money spent through the program nationwide.”

But not everyone is convinced that Amazon’s maneuver will pay off for the company.

The Associated Press reports:

“Internet consultant Sucharita Mulpuru-Kodali says Amazon’s move ‘seems inevitable’ because it’s saturated a good part of the affluent and middle-class sector — but describes it as a ‘head scratcher.’

” ‘These consumers have always indexed lower in online transactions, and their living circumstances are often not well-suited to package delivery, and many of these consumers don’t have vehicles to drive to a location to pick up packages,’ she wrote in an email. ‘Of the long list of businesses that Amazon could target, this doesn’t seem like the biggest one.’ “

Competition heats up

Amazon and Walmart each have been upping their game to cut into the other’s bottom line.

Walmart is pressing ahead with strategies to better compete against Amazon online. Last year Walmart announced it would acquire Amazon competitor Jet.com for $3.3 billion.

Last week Walmart announced that it would begin testing a program in Arkansas and New Jersey that would use store employees to deliver online orders at the end of their shifts.

Bloomberg reports:

“About 90 percent of the U.S. population lives within 10 miles of a Walmart, and the company is using those locations as shipping hubs to compete with Amazon on the last mile of delivery — the most expensive part of getting goods to customers. By using existing workers in their own cars, Wal-Mart could create a vast network with little upfront cost, similar to how Uber Technologies Inc. created a ride-hailing service without owning any cars.”

Walmart and Amazon are bending over backwards to make shopping easier for customers.

But low-income shoppers, and for that matter any online shopper, take heed: shopping with the click of a mouse can be trouble for your wallet.

The website CheatSheet.com recently remarked on two indications that you spend too much money on Amazon:

  • your credit card statements are full of Amazon purchases
  • your living room is cluttered with unopened Amazon boxes
Copyright 2017 NPR. To see more, visit http://www.npr.org/.

Trump To Talk Infrastructure In Ohio Valley, Where Investment Is Badly Needed Tuesday, Jun 6 2017 

With a speech planned for Cincinnati’s Ohio River waterfront, President Donald Trump has chosen a fitting venue to talk about infrastructure improvements. The Ohio Valley is home to aging highways, bridges and dams, poor drinking water systems, and weak internet service for many rural residents.

A report from the American Society of Civil Engineers found that Kentucky, Ohio, and West Virginia need billions of dollars for improvements to drinking and wastewater systems and have more than 700 dams considered “high hazards.”    

Trump’s focus on infrastructure has cheered regional development officials but his proposal to change how projects are funded is generating controversy.

Here’s a roundup of infrastructure needs in the region and what experts are saying about Trump’s plans.

Damaged Dams

The Ohio River is among the country’s busiest commercial waterways but its antiquated system of locks and dams frequently slows barge traffic. The Army Corp of Engineers is constructing the Olmsted Locks and Dam, a massive project in western Kentucky that should alleviate some of the worst bottlenecks. After decades of work the project is still years from completion and the price tag will likely top $3 billion.

Nicole Erwin

Olmsted is a multi-billion dollar fix for the Ohio, decades in the making.

Nicole Erwin | Ohio Valley ReSource

Trump has expressed interest in more public-private partnerships as a way to fund infrastructure projects, and a White House fact sheet floated the idea of waterway tolls to pay for river structures.

Budget watchdog Steve Ellis, vice president of Taxpayers For Common Sense, called that a pleasant surprise. He would like to see users pick up more of the costs for big projects and for officials to focus on repairing systems that are already in place. 

“We are already spending a good amount of money on infrastructure,” he said. “The question is, ‘Are we spending on the best, the highest priorities?’”

But Mike Toohey is skeptical about the president’s approach. Toohey is president of the Waterways Council, an organization advocating for inland waterways infrastructure. He said public-private partnerships and tolls may work for highways but probably not for waterways.

Toohey warned that shippers might switch instead to highways or rails, “putting Kentucky, Ohio manufacturers, agricultural producers at a disadvantage to those who make the same products elsewhere but are not on a waterway.”

Read “Ripple Effect,” the ReSource report on the Ohio’s aging system of locks and dams.  

Water Woes

The American Society of Civil Engineers identified billions of dollars in needed investment in drinking water and wastewater systems in the Ohio Valley region and many of those in most need are rural communities.

Benny Becker

Martin County’s water intake on the Tug Fork River.

Martin County, Kentucky, residents have struggled for years with tainted water and frequent service interruptions. On any given day in Martin County the water system loses more water to leaks than it delivers to paying customers through their faucets. The water system is under a state investigation for the third time since 2002.

“We drink nothing but bottled water,” Martin County resident Josie Delong said. “I even put bottled water in my kids’ bathroom when they brush their teeth.”

Further, poor wastewater treatment and persistent pollution from the region’s chemical manufacturing, mining, and power production add to the stress on some water systems.

For example, the toxic chemical once used in consumer products such as Teflon is still detected in some of the region’s water systems long after the chemical’s use was phased out. Scientists question whether the federal government’s current advisory levels for the chemical in water are sufficiently protective of health.  

Read “Troubled Waters,” the ReSource report on drinking water in rural communities.

Net Losses

Government data and industry surveys show that roughly half of rural Americans lack access to high-speed, broadband internet that’s needed for many common uses. That’s true for about a quarter of the counties in the Ohio Valley, where a majority of the residents lack high-speed internet.

broadband-revisited-accessAlexandra Kanik | Ohio Valley ReSource

With the internet becoming more important for school, work, and everyday life, many disconnected rural communities see this as an existential threat. In rural Letcher County, Kentucky, Jamelia Lewis said she has lost job opportunities and fears her son is falling behind in school because their community lacks internet service.

“I feel like he’s getting left behind because he doesn’t have what he needs to get his education,” Lewis said, “and that’s not fair.”

Read “Without a Net,” the ReSource report on rural broadband service.

ReSource reporters Glynis Board and Benny Becker contributed to this story. 

May Jobs Report: 138,000 More On Payrolls; Unemployment Dips Slightly Friday, Jun 2 2017 

Some 138,000 jobs were added to the U.S. economy in May, according to the monthly jobs report released by the Bureau of Labor Statistics Friday morning.

The national unemployment rate nudged lower, to 4.3 percent from 4.4 percent — a level that was already the lowest in 10 years when it was announced last month.

The number of unemployed Americans (6.9 million) remained essentially unchanged.

“Since January, the unemployment rate has declined by 0.5 percentage point, and the number of unemployed has decreased by 774,000,” the BLS said.

The figures were announced one month after job creation was seen bouncing back in April, when the initial report said the economy had added 211,000 jobs to nonfarm payrolls.

Economists had been expecting to see job gains of about 185,000, NPR’s Yuki Noguchi reports, with the unemployment rate holding steady.

“Among the unemployed, the number of job losers and persons who completed temporary jobs declined by 211,000 to 3.3 million in May,” according to the BLS report.

The Department of Labor also recently released more specific data about the job markets different U.S. cities are experiencing.

For metropolitan areas in April, the agency says, Ames, Iowa, and Boulder, Colo., had the lowest unemployment rates, at 1.7 percent and 1.8 percent, respectively. The highest unemployment rate was in El Centro, Calif., at 19.2 percent.

For large cities (with a population over 1 million in the 2010 Census), the Denver area had the lowest unemployment rate, at 2.1 percent. The highest rate was in the Cleveland, Ohio, area, at 5.4 percent.

Copyright 2017 NPR. To see more, visit http://www.npr.org/.

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