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By RON SELAK JR.
Staff writer
YOUNGSTOWN — From investments to expand operations to the launch of production at a new state-of-the-art electric-vehicle battery-cell plant to the long-awaited deliveries of a battery-powered pickup truck to the opening of hip downtown brewery, business-related news across the Mahoning Valley was mostly positive in 2022.
Still, there were some challenges, so without further delay, here are the top 10 business-related stories for last year:
1. Inflation
Inflation was rampant in 2022, reaching levels not seen since the early 1980s.
Brought on by several things, from pay increases to supply shortages to federal aid to Russia’s invasion of Ukraine, inflation has been pervasive and affects everyone, regardless of income level.
To avoid the U.S. economy from falling into a recession, the Federal Reserve aggressively raised interest rates in an attempt to reduce demand for goods and services that require credit.
“The government is not able to influence supply, but as COVID restrictions have eased around the world, supply of most goods and services has begun to increase. This combination of cooling demand with increasing supply is why we’re seeing inflation begin to ease,” said Albert J. Sumell, economics professor at Youngstown State University.
The most recent government report for November showed inflation was 7.1 percent. It was the fifth consecutive month inflation fell from hitting a high 9.1 percent in June. December’s rate won’t be available until later this month.
And unfortunately, there’s little consumers can do to cushion the impact.
“Inflation is pervasive, and affects everyone regardless of income level. The only thing that can be done to reduce its impact is (if possible) to wait until inflation cools before making major purchases like for a new house or car,” Sumell said.
“That being said, there is no way of knowing how long one would have to wait and what the situation will be for the overall economy when inflation is under control. One should weigh the need and ability to pay for big items now against the potential savings associated with waiting,” he said.
2. Foxconn
flourishes
Taiwanese technology and electronics giant Foxconn dominated local headlines, first with its purchase of the former General Motors small-car plant in Lordstown in May and then with vehicle manufacturing announcements over the last six months of 2022.
It was November 2021 when Foxconn and Lordstown Motors Corp. announced a definitive asset purchase agreement was in place for the plant, but negotiations over a contract manufacturing agreement for Lordstown Motors’ first vehicle, the Endurance truck, and a joint EV development agreement took several months.
When the deals finalized, Foxconn set off transforming it capabilities into a mass-producer of electric-vehicles.
In August, Foxconn announced it secured a contract manufacturing agreement with Monarch Tractor to produce the Livermore, Calif.-based company’s MK-V Series tractor, a battery-powered driverless tractor.
Production is scheduled to launch in 2023.
That was followed by news in October that Foxconn and Los Angeles-based INDIEV had an agreement for Foxconn to prototypes of the electric-vehicle startups INDI One, a car capable of high-speed online gaming and streaming through a super-powered vehicle-integrated computer.
With that agreement, both companies expressed interest in finalizing a contract manufacturing agreement that would have Foxconn mass produce the vehicle.
Also in October, Foxconn and Youngstown State University announced they intend to partner to design and launch an electric-vehicle workforce training and innovation center. It’s at the center of a plan to cast the Mahoning Valley as a national hub of EV workforce development excellence.
Then in November, Foxconn agreed to invest up to $170 million into Lordstown Motors. On Nov. 22, as planned, the first round of equity investment closed. It was worth about $52.7 million, proceeds Lordstown Motors will use to run the company and start a new EV development program with Foxconn. The EV development program replaces the joint venture to co-design electric vehicles.
3. Ultium Cells
powers up
It’s been an eventful year for the Ultium Cells electric-vehicle battery-cell manufacturing plant in Lordstown.
The factory, the first operation in a joint venture between General Motors and South Korea’s LG Energy Solutions, started production in August and has been shipping cells to GM for use in vehicles that include the Cadillac LYRIQ and GMC Hummer EV.
And last month, workers at the plant voted to unionize under the United Auto Workers. The 900 or so workers at the plant were the first to decide on union representation at a battery plant.
Ground on the $2.3 billion plant was broken in April 2020. The journey from then to now has been “rewarding, exciting, full of learning and opportunity,” said Ultium Cells spokeswoman Brooke Waid.
“From the beginning, roughly a little more than a month after we announced our plans for the Ultium Cells facility in Ohio, we were all facing a global pandemic. We had to get creative and be flexible with our plans to progress safely, overcome uncontrollable supply chain disruptions and breakdown cultural barriers,” Waid said. “We had the combination of LG’s electrochemical expertise and GM’s century-plus of manufacturing experience, but we had our share of growing pains as we navigated through our startup phase and ultimately finding an identity of our own.”
“It’s humbling to look back on how much we have matured, but it is even more encouraging to look ahead at our journey just beginning to unfold and the dedicated team that is committed to excellence and to each other. If the past two years of learning, training and launching has taught us anything, it’s that we can adapt and lead in times of change — like this team has done and continues to do.”
Once fully operational in late 2023, the plant will employ more than 1,500 workers — a number greater than originally expected.
On Dec. 7 and 8, the National Labor Relations Board oversaw a vote by workers at the plant to join the UAW. The tally was 710 to 16.
“The vote shows that they want to be part of maintaining the high standards and wages that UAW members have built in the auto industry,” union President Ray Curry said in a statement.
GM CEO Mary Barra said she would like to get a contract with the union at the Lordstown plant as quickly as possible. But the issue could be rolled into national contract talks with the automakers that are coming next year. The talks could become contentious with new union leaders who want to take a more confrontational stance.
4. Delphi retirees
get big win,
but saga continues
The 20,000 or so Delphi salaried retirees who lost their pensions when the former auto parts supplier went bankrupt got a big win in the more than 13-year-long fight to have the lost benefits restored in July.
That was when the U.S. House of Representatives voted 254-175 in favor of the Susan Muffley Act, a bill that would require the Pension Benefit Guaranty Corporation — the insurer of last resort for the nation’s private retirement plants — to make up the difference between the partial retirement benefits PBGC already has paid retirees and what they originally were due in one lump sum. PBGC took over the pensions in 2009.
The retirees also would receive 6 percent interest on the retroactive pay to help ease the tax burden.
Then, moving forward, the retirees would receive their full pensions as if they never were disrupted.
The bill, however, stalled in the Senate.
In early August, U.S. Sen. Sherrod Brown bought the Muffley Act to the Senate floor, seeking unanimous consent — a process that expedites the course of the legislation. He was unsuccessful when Republicans blocked his attempt despite some GOP support, including from former U.S. Sen. Rob Portman, R-Ohio.
Republicans in the Senate and House opposed the bills because they said, in part, it creates bad precedent that other plans controlled by the PBGC would follow.
Supporters, meanwhile, say the bill is about fairness and restoring the retirement benefits the salaried retirees rightfully earned.
Then, Brown took another legislative approach in October, attaching the act as an amendment to the 2023 National Defense Authorization Act. The act did not make as a part of the NDAA, nor was it part of an Omnibus spending bill, also approved late in the year.
According to Brown’s office, he plans to reintroduce the bill in the next Congress and “continue to fight for Delphi salaried workers.”
For the group of Delphi retirees, its 13-year legal battle with the PBGC to try to win back the involuntarily terminated pensions ended in January when the U.S. Supreme Court declined to consider their case.
Delphi, formerly Packard Electric that at one time was part of General Motors’ parts division, filed for bankruptcy in October 2005 and emerged four years later. While Delphi was in bankruptcy protection in 2009, it relinquished responsibility for all its employee pensions to PBGC.
In its own government-planned bankruptcy in 2009, it was determined GM would fund fully union pensions for Delphi hourly employees. The salaried retirees weren’t as fortunate and have argued their pensions should have been covered as well.
5. Lordstown Motors Corp. endures
Lordstown Motors Corp. hit a major milestone in the electric-vehicle startup’s brief history — deliveries of its flagship vehicle, the Endurance, the company announced in December.
The company also sold its auto plant, the former General Motors small-car assembly plant in Lordstown, in May to Taiwanese technology and electronics giant Foxconn, signaling a shift away from manufacturing toward engineering and developing EVs.
Lordstown Motors also got a fresh injection of capital from Foxconn, and the Endurance is a finalist for the North American Truck of the Year.
Still, 2022 wasn’t without its challenges for the company.
Although, production of the truck has begun, it was in limited numbers and production estimates for the year were lower than previously predicted.
The company in November said 12 of the first batch had been built at the plant with production ramping up as part pedigree and availability issues get resolved.
About 30 trucks were expected to be built by the end of the year with the remaining built in the first half of 2023. That, however, was down some from what the company reported in late September when it announced it expected to deliver 50 trucks to customers this year and up to 450 more in the first half of 2023.
The company’s stock continued to fall and even hit an all-time low, even with the news that Lordstown Motors and Foxconn closed on the first round of a $170 million equity investment. The initial transaction, worth about $52.7 million, will be used to run the company and start a new EV development program with Foxconn.
6. Brewing
a business
The husband and wife duo behind Penguin City Brewing Co., Richard Bernacki and Aspasia Lyras-Bernacki, purchased the former Republic Street warehouse downtown in December 2020 with grand dreams to remake it into a production facility and taproom.
Their dream came true in July.
“People have been constantly asking us when we were going to open,” said Lyras-Bernacki at a celebration to mark the grand opening. “To now be open is definitely a dream come true.”
They spent about $4 million for the company’s production line and to open the taproom and brewhouse along with an event center and rental space at the 32,704-square-foot property at 460 E. Federal St. That included buying the building for $575,000 in December 2020.
“We knew we could create something here,” Lyras-Bernacki said.
Since opening, Penguin City has hosted professional meetings, fundraisers and private parties, including wedding receptions, as well as public events that included live boxing.
7. Moving in
The decision by New Castle,Pa.-based Steelite International to relocate its executive headquarters to the Taft Technology Center represented a couple of firsts — it’s the first time in decades a company has moved its headquarters downtown and it’s the first time ever the city offered to refund its income tax for a company to locate here.
Steelite in June announced the move, which centralizes its local operations; Steelite already has its largest showroom and experience center at the downtown Commerce Building, 201 E. Commerce St., just a few blocks away.
The company provides tableware, buffet equipment and lighting solutions in the hospitality industry, from hotels to restaurants to convention centers to cruise ships to stadiums. According to the company’s website, it produces more than 500,000 pieces of tableware per week and ships to 140 countries.
In July, Youngstown offered to refund its 2.75 percent income tax on a sliding scale to help ease the transition for employees from New Castle, which does not have an income tax. That meant those workers would have taken a 2.75 percent pay cut to move.
Between 60 and 70 employees work at the company’s headquarters.
The five-year incentive package calls for a 100 percent refund in 2023, 75 percent in 2024, 50 percent in years three and four and 25 percent in year five.
Said city Finance Director Kyle Miasek, “we see this as a positive step forward to attract the business to the city,” Miasek said. “We don’t have any of this income tax revenue so we’re not losing anything. Then beginning in year two, we’ll start getting tax revenue. This will help grow the city’s income tax base.”
8. Intel’s impact
Chipmaker Intel’s $20 billion investment into semiconducting will surely benefit the Columbus area, but the potential for spinoff economic development opportunities across northeast Ohio, including the Mahoning Valley, is high.
That’s why development officials and educators are doing their best to be prepared, from workforce development to supply chains.
It the reason for the formation of the Northeast Ohio Intel Supply Chain Task Force, a group of economic development officials from the Valley, Cleveland and Akron / Canton regions and members of the business and higher-education communities to learn more about Intel, semiconductor manufacturing and related businesses that support the chip-making industry.
It’s about getting intel on Intel.
“We’ve learned enough to be effective at attracting other chip manufacturers and their suppliers, and I think some of those projects are already in the works,” said Guy Coviello, president / CEO of the Youngstown / Warren Regional Chamber, in October.
The workforce needed is different; it’s a new high-tech type of workforce that need specific skills training and education to work in the industry.
To that end, three regional higher education institutions are part of an effort to develop semiconductor-focused education and workforce programs.
YSU, Kent State University and Eastern Gateway Community College are part of collaborative efforts funded with $17.7 million by Intel to develop the programs.
9. Higher demand = big investment
In a move to increase capacity at its North Jackson plant to meet growing demand in the aerospace industry, Pennsylvania-based Universal Stainless & Alloy Products spent about $15 million to improve the local mill.
“The reason for the investment there was to add new technology to our company to enable us to bring more technology-advanced products into our product portfolio,” said Dennis Oats, company chairman, president and CEO in May.
The project was to add 13,500 square feet to the 256,000-square-foot facility on South Bailey Road and bring online two new vacuum arc re-melt furnaces, giving the mill seven. The expansion is large enough to accommodate two more re-melt furnaces planned for the next three to four years.
The mill produces specialty steels, including nickel alloy, stainless steel and low alloy steels melted using vacuum-induction melting mostly for use in the aerospace industry.
It was expected the work would be done sometime in the second quarter of 2023.
10. Mercy Health makes moves
Renovations to the new Mercy Health-Belmont Medical Center are nearing completion, with an expected opening in early 2023, according to Mercy Health-Youngstown spokeswoman Kara Franz. The center is at the site of the former VA clinic on Belmont Avenue on Younstown’s North Side.
Belmont Medical Center will be the new home of a variety of services, including an expanded Family Medicine Residency Program, a new Addiction Medicine Fellowship, an obstetrics and gynecology clinic and a Centering Pregnancy Program.
Meanwhile, other plans for a standalone rehabilitation center in partnership with Lifepoint Rehabilitation, a business unit of Lifepoint Health somewhere in the Mahoning Valley, are continuing.
A location, and the investment planned for the facility, hasn’t been announced, but it’s being called Mercy Health Rehabilitation Hospital.
“Construction of this standalone, 60-bed, acute inpatient rehabilitation hospital is still expected to begin in the spring of 2023 with an opening in the fall of 2024,” said Franz.
Also, plans to relocate St. Joseph Warren Hospital from Eastland Avenue in Warren to land adjacent to Kent State University at Trumbull in Champion are temporarily on hold “due to the current national economic volatility, inflationary pressure and financial challenges health care systems nationwide are experiencing.”
The move was intended to allow the hospital to better serve growing health care needs in the region. Mercy had expected to break ground on the new building early next year. The anticipated 400,000-square-foot facility would have been the first new hospital built in the area since Mercy Health constructed St. Elizabeth Boardman Hospital in 2007. It was planned to have 241 beds and to provide full inpatient and outpatient services, with room to grow.
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