Friday, July 29, 2011

Owensboro continues to post strong job growth numbers

The Owensboro Metropolitan Area continues to post strong employment numbers based on the latest figures released by the Bureau of Labor Statistics.  The Owensboro area had 1,275 more jobs and 1,162 more people in the regional labor force this year compared to the same time last year.

EDC President Nick Brake attributes this growth to expansions at several area manufacturing facilities as well as the 500 job expansion at US Bank Home Mortgage.  He also indicated that construction projects such as the new hospital, road projects, and downtown are fueling the healthly job numbers.

Wednesday, July 20, 2011

Owensboro entrepreneurs recognized

In this globally competitive marketplace, finding your niche is of vital importance. Owensboro natives and entrepreneurs Carter Gaddis and Neel Ford saw an opportunity and went for it. What they and their partners have created, the Sleeve360, allows iPad users to comfortably "wear" their iPad via a rear support strap that also allows the iPad to fully rotate for presentation, demonstration, or screen sharing. The applications are endless, but it is easy to see how such an innovation could be useful to the hospitality, restaurant and medical industries.

Now, their latest version for the iPad2 has been reviewed by one of the best Apple product websites out there, TUAW (the unauthorized apple weblog). In the website's ongoing "smackdown" series, which pits similar products against each other, TUAW proclaims the Sleeve360 as the "hands down" winner, stating that the "case is much easier to put on and take off, the rotation mechanism can be easily removed, and it the case really does work well as a stand in either portrait or landscape mode," and that it is "much more comfortable to wear." The full review can be read at

Innovation is everywhere in this town, and it is precisely this type of fresh, global product, that will keep Owensboro competitive for years to come.

For more information on the Sleeve360, or to place an order, visit

Citistates report reveals strengths and challenges

July 19--"I'm bullish on Owensboro," Keith Schneider told a group of about 50 people who came out to hear the first report from "What's Done, What's Next: A Civic Pact" on Wednesday at Owensboro Community & Technical College.

"I'm more bullish on Owensboro than Owensborans are," he said. "But I'm not blind. People here are having a tough time" financially.

For a city trying to compete worldwide for investment, Schneider said Owensboro is awfully white.

"You need more Jewish people, more Asians and more gays," he said.

In 1991, John Hager, then owner and publisher of the Messenger-Inquirer, brought syndicated columnist Neal Peirce to town to take an in-depth look at the community.

This year, Hager's Public Life Foundation of Owensboro has brought The Citistates Group, a network of journalists, speakers and civic leaders, to town to study how much the community has changed and in what directions it needs to go.

Schneider, a special correspondent for the New York Times since 1981, presented the report Monday on how the community has changed in the past two decades.

He said he's planning a story for the New York Times on Owensboro's downtown development and is pitching a story to his editors about the Community Campus program.

Owensboro, Schneider said, "is in a good position (for the future), but you and the rest of America need to be in a better position."

The United States, he said, "doesn't set the velocity of change in the 21st century. China does."

Having a lot of downtown on-street parking "is not a strength," Schneider said. "And you've got lots of parking." 'The city's population grew by 6.9 percent over the past 20 years, he said. The county grew by 10.9 percent, the state by 17.7 percent and the nation by 24.1 percent.

Significant problem with population

"You've got a significant problem with your population," Schneider said.

"The whole country is struggling to figure out what normal is now," Curtis Johnson, Citistates' CEO, told the crowd. "The long period of American exceptionalism is now at an end."

Gabrielle Gray, executive director of the International Bluegrass Music Museum, said fans attending ROMP last month told her, "We are the coolest place in Kentucky."

But Owensboro is off the beaten path and has to be a destination, she said.

Hugh Haydon, chairman of Kentucky BioProcessing, was head of the Greater Owensboro Economic Development Corp. and president and chief executive officer of what is now the Greater Owensboro Chamber of Commerce at different times in the two decades.

At one time, he said, the community touted itself as a place with cheap electricity and cheap labor.

But, he said, "at some point, there was a recognition that even if we're successful, we lose."

Haydon said that led to a strategy of trying to create better paying jobs in the community.

"It's more important," he said, "to attract young people to a community than it is to keep your own."

"One of the things that surprised me was the disgruntlement about Owensboro," Schneider said. "Part of it is that we're a grumpy nation at the moment."

Madison Silvert, executive vice president of the Greater Owensboro Economic Development Corp., said part of the problem is "a narrow world view" among some people in the community.

Scheider told the crowd that "the quality of your leadership is very good."

The report notes the development of a new $385 million medical center east of Owensboro and the growth of U.S. Bank Home Mortgage to 1,600 employees by fall

"Last year, the city and county added 1,100 new jobs, a 2.3 percent increase that led all Kentucky metropolitan areas in job growth," it said.

Challenges lie ahead

But it also noted challenges that lie ahead.

More than 80 percent of adults in the region are not college graduates.

"Median household incomes -- $43,000 last year -- are higher than the Kentucky median income, but...are still not high enough to provide adequate support for a family," the report said.

It found that 15.2 percent of Daviess Countians live in poverty. That's lower than the state rate but 6 percent higher than the national average.

The county's lack of diversity -- more than 90 percent of Daviess Countians are white -- "could hurt Owensboro's competitiveness in encouraging investments from overseas and especially from China, the fastest growing industrial economy in the world," the report said.

It adds that "almost everyone a visitor meets in town either has a college-educated son or daughter or knows someone with a high-achieving son or daughter, that couldn't find a well-paying job in Owensboro."

Another challenge, the report said, is that "five of Daviess County's top ten employers are public institutions and account for over 4,200 well-paying jobs with benefits."

It adds, "It's likely that sector will steadily shrink over the next generation....(T)he emerging and possibly permanent economy will also put a cash collar around organizations like OMHS and River Valley Behavioral Health."

But the report notes that Owensboro has lost only 5.3 percent of its manufacturing jobs in the past two decades, when other communities were losing far more.

And it pointed out that the new Community Campus offers a curriculum and training program to match high school students with job training and future employment in local businesses.

The second and third reports on the community are scheduled for August and September.

The report is available at

Keith Lawrence, 691-7301,


Tuesday, July 12, 2011

Owensboro issues RFP for Riverfront Crossings

The City of Owensboro has released a Request for Proposals (RFP) for the development and construction of two mixed-use buildings at Riverfront Crossings in Downtown Owensboro. Conceived as park of the Downtown Placemaking Initiative, Riverfront Crossings—scheduled to open on September 8, 2011—will offer a unique and exciting new downtown destination to compliment and reinforce other major destinations of the new downtown, including the new Riverfront Park with Veterans’ Boulevard linear plaza, the proposed new hotel and Convention Center, and proposed improvements to historic Second Street. Riverfront Crossing is envisioned to be a lively but quaint outdoor entertainment and dining venue with a festive, “alley” look and feel.

Riverfront Crossing incorporates building sites for two new mixed use buildings. The first, SITE A, also known as the “Lofts at the Crossing” is located directly across the street from the new Riverfront Park and fountain and has a north-south orientation. The second, SITE B, is also known as “The Crossing Pub”, is intended to be the site of a pub or restaurant. The building site runs east-west and fronts both on St. Ann Street and on the central plaza of The Crossing adjacent to the Crossing’s signature tower.

All firms that submit their qualifications for considerations shall be reviewed and ranked based on the following criteria: 1) Firm/Team experience with similar projects; 2) Qualifications of the project team; 3) Cost estimation; 4) Preparation and understanding of the project; 5) Proximity and local participation

The City will hold a pre-submittal meeting regarding this project at 10:00 a.m. on Thursday, July 21, 2011 in Room 406, City Hall, 101 East 4th Street, Owensboro, KY 42303. Specifications for the above are on file and may be obtained from Joey Beatty, Purchasing Manager, City Hall, 101 E 4th Street, Room 119, Owensboro, KY. 42303. Telephone (270) 687-8431. Submittals must be delivered to the City Purchasing Department, 101 E. 4th Street, Rom 119, Owensboro, KY 42303 on or before 4:00 p.m. prevailing local time on Tuesday, August 30, 2011. The City of Owensboro reserves the right to reject any and all submittals and to waive any irregularities in said submittals.

The EDC, city and county are currently implementing a fully funded $140 million Downtown Placemaking Initiative in consultation with Gateway Planning of Ft. Worth TX. The resulting master plan was finalized and adopted by the City of Owensboro and Daviess County in January 2009. A copy of the Placemaking Initiative may be viewed at:  Visit to view the initial design considerations for Riverfront Crossing designed by architect Michael Huston.

OCTC grant will train OMHS staff on electronic medical records

Owensboro Community and Technical College will help train hospital employees on new medical record software.

A $500,000 grant will pay for the partnership and help implement the new technology.

"This is the largest Kentucky Wins award in the Community Technical College System," says OCTC President Dr. Jim Klauber.

Owensboro Medical Health System has invested $55 million to help keep patient's records up to date. They now a new partnership as well.

"With that said, we have an agreement to sign."

State Representative Jim Glenn says OMHS employees will train to use the new Epic software at OCTC.

"Implementation is the most important thing of any technology we have."

So far, nine OMHS clinics actively use the new database. Employees have converted these files into a real time electronic database called Epic.

OMHS CEO Dr. Jeff Barber says patient history will benefit from this transition.

"It gives us a real comprehensive opportunity to look at that patient's history and treat them appropriately in a faster manner and more safer manner."

If patients visit a different clinic, files can be accessed by internet instead of fax machine, and the records are more accurate and have the latest medical history.

Over 3,000 employees will train, and the grant money will pay for the time spent to learn it all over the next eight months.

The whole hospital will implement the new system by December 1st.

Monday, July 11, 2011

Can U.S. Manufacturers Compete With the Chinese?

Ms. Ying-Juan Rogers, Executive Vice President - World Trade Center Kentucky

Recent research by IHS Global Insight reveals that as of 2010, China is producing 19.8 percent of the world’s manufacturing output and, consequently, has become the largest manufacturer in the world, a position that the United States had previously held for almost 110 years. A growing fear of United States manufacturers is that there will be an increase in the number of factories shutting down and jobs moving overseas.

However, the China Federation of Logistics Purchasing Managers Index showed in May that new manufacturing orders in China were declining at a faster pace than the overall economic slowdown, a key indicator that manufacturing activity in China may have already peaked in the current economic cycle.

In this article we will examine the effects of rising labor costs, labor shortage, inflation, and increased energy costs in order to gain a more accurate perspective on the current situation and likely future of the Chinese manufacturing industry.

Rising labor cost

Traditionally, China is seen as both a labor-abundant and low-cost producer, which enables manufacturers to comfortably undercut competitors in production costs. However, this may no longer be the case.

Throughout China, wages are climbing at the rate of 15 to 20 percent a year, and Credit Suisse estimates that they will continue to rise 20 to 30 percent every year for the next three to five years.

According to People’s Daily (March 2011), between 2005 and 2010 the average wage for migrant workers in big cities increased 14.1 percent per year, from approximately $130 to $252 per month. At current rates, China’s wages could double in as few as five years.

Wage rates in Chinese cities such as Shanghai, Beijing and Tianjin are currently only 30 percent cheaper than rates in low-cost U.S. states. Overall, manufacturing in China will only be 10 to 15 percent cheaper than in the U.S.–even before inventory and shipping costs are considered.
Shortage of labor force

China is facing an increasingly acute labor shortage. Some manufacturers, already weeks behind schedule because they cannot find enough workers, are closing down production lines and considering raising prices. There is a strong demand for young workers willing to work long hours and live in dormitories, conditions that older workers, those over forty, are considered unsuited for.

This current shortage is compounded by the fact that the average annual growth rate of China’s working-age population is beginning to slow down. The number of 18-year-old new laborers dropped from 27.9 million in 2002 to 22.5 million in 2010, and it is estimated that it will continue to decrease to 16.6 and 14.8 million respectively in 2015 and 2020.

The drop in the working age population is largely driven by demographic trends and strict family planning. The demographic shift resulting from the one-child policy ultimately serves to reduce the supply of young entry-level workers. Additionally, there has been an increase in the number of young people choosing to attend college rather than opting for minimum-wage factory work.

Although there has been an increase in the number of Chinese young people attending college, there is also a serious shortage of skilled workers in the country. Often this results in massive poaching among rival companies and huge wage increases being offered to workers, which ultimately results in higher costs for the companies.


Recent data from the China National Bureau shows a 5.3 percent increase in their consumer price index in April - a slight easing from March but well above Beijing's official 4 percent target for 2011. This rising inflation within China is driving up the cost of production in China and is also driving up the cost of Chinese goods compared to the rest of the world. Consequently, it is eroding some of China’s formidable advantage in export markets.

Over the past 12 months, the U.S. has witnessed a 2.8 percent increase in the price of goods imported from China.

Energy cost increase

In 2010, the energy-hungry Chinese economy burnt a staggering 3.2 billion tons of coal, which accounts for 70 percent of China’s electricity. The Chinese government has already warned that the country may soon hit peak coal production, which would in turn force greater reliance on costly imports. China’s Electricity Association is warning that there will be the nation’s largest power shortage in history this summer. As many as 20 provinces and territories have already been put on power rationing, including the country’s industrial heartland.

This predicted shortage and power rationig has driven up coal prices. Benchmark power-station coal prices at Qinhuangdao port rose 0.6 percent from the previous week to between $128.03 to $130.34 a metric ton on May 30th, 2011, according to the China Coal Transport and Distribution Association. That is the highest price recorded since October 2008.

The government also raised retail power prices for non-residential users in 15 provinces by about 3 percent this month - the first hike since November 2009. The wholesale prices charged by generators to distributors were also raised an average of 5 percent in three provinces after being pushed up in 12 other provinces in April, according to the National Development and Reform Commission, which sets energy prices in China.

The rationing of power and the rise of energy prices will undoubtedly negatively impact many manufacturing operations in China. Plants will face restricted production capabilities and higher overall costs.


Because of rising labor costs, labor shortage, inflation, and increased energy costs in China, manufacturing companies such as Coach, Inc. have already moved production out of the country, and others are reluctant to begin operations there. Some research-intensive sectors such as pharmaceutical, biotech and other life sciences companies are also reconsidering China. In addition to these reasons, which have resulted in an overall cost increase, some U.S. businesses are hesitant to set up operations in China because of the complexity of the business environment there. Obstacles such as cultural differences, political risks and intellectual property issues have also become serious considerations. Some U.S. corporations feel that domestic facilities are easier to manage and that the abundance of skilled workers is an undeniable advantage.

The stability of U.S. manufacturing is illustrated by research done by Boston Consulting Group which projects "that by 2015, strong productivity and relatively low wages would help the U.S. move ahead of China as a base for making goods which will be sold in North America."

U.S. manufacturers have the advantage of producing goods necessary for information technology and media-related industries, and are the leader in the production of chemicals, aircraft engines, industrial machinery, and military defense. These sectors are designed to produce goods that are vital in a technology-based, globalized economy. China, on the other hand, has a manufacturing base that is much more dependent on cheaper goods in sectors such as textiles, apparel, appliances, and certain commodities.

In the long-run it appears that fears of the dramatic decline of the U.S. manufacturing sector are largely unfounded, and that there is a significant possibility that manufacturing activity in China has peaked in this economic cycle and will actually begin to decline.

Ms. Ying-Juan Rogers
Executive Vice President
World Trade Center Kentucky, 333 West Vine, ste 1600, Lexington, KY 40507
Phone: 859-258-3139, Cell: 859-494-6631