Indiana: Logistics Coming Together at the Crossroads
04 Jan, 2013
By David Hodes
Indiana is becoming a logistics powerhouse. With new highways coming together, such as U.S. Highway 31 and I-69 (where the first 67-mile stretch just opened), and with a central location as the crossroads of the country, Indiana is positioned to be a place where distribution warehousing can find a suitable place to do business in a cost-effective way.
Gov. Mitch Daniels in 2005 and 2006 enacted major moves to fund a highway plan that included 200 new construction and 200 major preservation projects for the state, says Katelyn Hancock, director of media relations at the Indiana Economic Development Corp. (IEDC). More recently, she says, the IEDC has seen projects that are being completed that help economic development now that companies have easier access to highways and interstates. “We have always been the crossroads of America,” Hancock says. “So just building on that strength for us, with having even more interstates and highways, has really helped economic development.”
The most popular incentive in the state, Hancock says, is the refundable tax credit, Economic Development for a Growing Economy (EDGE). Tax credits are based on the additional employee payroll withholdings for net new job creation in Indiana. EDGE may be taken for a period of up to 10 years. Credits are applied against the company’s Indiana income tax liability and are refundable.
For more of an investment tax credit, companies can take advantage of the Hoosier Business Investment (HBI) tax credit. HBI tax credits are available to a company making a qualified investment — new buildings, building improvements and equipment — in an Indiana facility. The credit award may equal up to 10 percent of the qualified investment, and may be carried forward for up to nine years. “We had a record number of deals this year for the automotive industry,” Hancock says.
For example, in November, Hitachi Powdered Metals (USA) Inc., a powdered metal components supplier, announced plans to expand operations in Greensburg, creating up to 60 new jobs by 2014. Hitachi joins 11 other Japanese companies that committed to locating or growing operations in Indianain 2012, creating more than 1,390 projected new jobs and more than $4.3 million in investment.
Industries and Innovations
Harrison County is in a good location for automotive manufacturing as well, says Darrell Voelker, director of the Harrison County Economic Development Corp., because of the community’s proximity to the Ford Motor Co. (running two shifts and employing 3,000) and that company’s strong presence in Louisville, Ky., just a 30-minute drive to the east.
There is also a Toyota Motor plant just 90 miles to the south in Georgetown, Ky., Toyota’s first wholly owned manufacturing facility in the United States; and a Toyota assembly plant in Princeton, Ind., the fourth Toyota manufacturing facility built in the United States employing 4,500. “We have not been successful with a Japanese-based automotive supplier yet,” Voelker says, “although we have had dozens of them visit and show an interest. But we have had Ford suppliers and we have one presently manufacturing parts for the Ford Escape. So part of our goal is to keep them and some of the other manufacturers happy.”
One of the better known automotive related companies is Lucas Oil Co. in Corydon, which Voelker says has between 50 and 70 patented products related primarily to motor oil and fuel additives for the race car business. The company moved to the area in 2002 with a relatively small production facility. “They also bought the LNA&C Railroad that helped keep them in business,” he says. “That was one of the economic development corporation’s biggest projects — to assist them in the purchase of that because we needed to keep the railroad here. If we hadn’t been able to do that, Lucas would have had to leave because they depend on it bringing in a lot of tankers.”
A lot of automotive expansions have been the bread and butter this year for Hoosier Energy Power Economic Development, says Harold Gutzwiller, the manager of key accounts and economic development. “We are also still seeing some value-added agriculture such as turkey processing,” he says. “And we are seeing an inland naval base (Crane) in our service territory and a lot of development associated with that project.”
Gutzwiller says that the southern region of the territory will probably see more logistics activities. This is due to the development of 67 miles of new interstate of I-69 from Crane Naval Surface Warfare Center Base, the third-largest employer in southwest Indiana, to Evansville. Another section will be completed in 2014 to Bloomington.
One of the largest investments that Hendricks County has experienced in the last five to 10 years has been Steel Dynamics, Inc., says Cinda Kelley, executive director of Hendricks County Economic Development Partnership. Steel Dynamics, the nation’s fifth-largest producer of carbon steel products, announced plans to expand its operations in Pittsboro in April, creating approximately 50 new jobs by this year.
Regal Beloit Corp., a manufacturer of electrical and motion control products, announced plans in October to consolidate its operations in Plainfield, creating up to approximately 50 new jobs by 2015.
The Beloit, Wis.-based company, which manufactures electric motors, generators, gear drives and electronic controls, will invest $8.1 million to operate a 376,000-square-foot facility. “So we continue to see our main sectors, which is manufacturing, motor sports, medical devices and logistics, which are our strengths, continue to grow,” Kelley says. “A lot of that growth has been existing companies.”
There have been a couple of strong projects in Carroll County, says Laura Walls, executive director of Carroll County Economic Development Corp. One of the area’s biggest employers, Indiana Packing Corp. in Delphi, a pork processing facility, recently invested more than $100 million in new construction and plant improvements at its 600,000-square-foot plant that employs 1,700. The opening in late October of the Hoosier Heartland Highway, a four-lane highway that replaced the two-lane rural State Road 25 between Delphi and I-65, has also helped boost interest in development in the county. “That gives us the assets that the transportation logistics distribution companies are looking for when they are doing their site analysis,” Walls says.
Talent and Education
Harrison County is the “workforce shed” to the Louisville metro area, Voelker says. “We have almost 20,000 in our workforce in the county and at least half of them go to Louisville to work.”
Louisville has a large health care network — including the University of Louisville Health Care and the Louisville Medical Center — and UPS has their world hub there, the 5.2-million-square-foot Worldport, the largest in the world, which employs 18,000 people. “The health care network and the Ford Motor Co. and UPS combined employ a significant number of Harrison County residents,” Voelker says.
One example of education assets for the state is the Hendricks College Network in Avon, which brings together six different colleges and universities — including Indiana State, Indiana Tech and the University of Indianapolis — with satellite offices and facilities in the county, along with Ivy Tech engineering programs and a certified logistics program through Vincennes University in Plainfield. Kelley is also the president of that group. “Our relationship with that entity, with that group, has been key to our workforce development,” she says.
Indiana is nationally known for its $10 billion, 10-year transportation strategy that will see more than 400 miles in new highways built by 2015, along with dozens of bridge and other improvement projects. The state has 41 freight railroads, 14 interstates, and is first in the United States for interstate highway access.
The state is also home to the only statewide port system providing international connections for the country’s heartland via the Great Lakes and Ohio-Mississippi River system. There are more than 680 airports in the state, and Indianapolis International Airport is home to the second largest FedEx hub worldwide.
Walls says that Carroll County is looking forward to the completion of the Hoosier Highway, which will eventually enable access to the Port of Toledo. “So from a logistics standpoint,” she says, “a four-lane highway between here and the Port of Toledo will really help get goods in and out of here.” The county hopes a hotel and a distribution center will be coming to the area soon.
Hendricks County is located in central Indiana, with easy access to all of the amenities of downtown Indianapolis, like sports entertainment with the NBA’s Pacers or 23 miles of walking and hiking trails. Kelley says that they just conducted a quality of life survey working with a number of entities in the county, looking at what is important to residents. “So that when we are talking to companies and trying to attract talent to new companies, we can speak better to that exact question of what are the amenities,” Kelley says.
Indiana has quietly been working on revitalizing its workforce and coordinating its infrastructure. But there are other reasons to shed a positive light on the state’s economic picture. “I would say that Indiana becoming the 23rd right to work state in February has definitely been a big icing on the cake for us in the last eight years of this administration,” Hancock says. “It was definitely an enhancement to our business climate.”
There is strong evidence that the economy is steadily growing, with companies small and large expanding operations and hiring new workers. “I would like to see more of the successful entrepreneurial spirit here,” Voelker says. “I think we can be more on the front end of the entrepreneurial program and be there as a guiding light for an individual or business that can go in and do their own thing.”
For complete details on conducting business in Indiana, visit:
Illustration by idea go at Free Digital Photos.net