Auto Industry Thrives in Missouri

19 Feb, 2014

By Rachel Duran

Missouri’s economic development team is putting the workforce first, resulting in the attraction of major investments by companies that can depend on workers with validated skills.

The state’s Missouri Works program, which passed last year, streamlines incentive and training programs. “This year is about providing initiatives to capitalize on the companies that are in the STEM [science, technology, engineering and math] areas,” says Mike Downing, director, Missouri Department of Economic Development. “We are supporting our universities, community colleges and high schools in more STEM education areas because this is the high quality talent that these growing companies need.”

In addition, Missouri is one of the states taking part in the Certified Work Ready Communities initiative from ACT, the college testing group. “Several of our counties were among the first certified,” Downing says. “These counties’ officials worked with their employers to commit to using WorkKeys as a preference in hiring.”

WorkKeys is a job skills assessment system that measures foundational and soft skills to help employers make strong decisions in the hiring process. The program is part of the ACT’s Work Readiness System.

Jasper County was the first county in the country certified as a Certified Work Ready Community. The county includes most of Joplin, says Rob O’Brian, president, Joplin Area Chamber of Commerce. The skills are certified, validated and are transferable to employers across the nation.

O’Brian says last fall, ACT rolled out the Certified Work Ready Community program on a county by county basis as not all states have adopted the programming. Two of the three Kansas counties that are part of the Joplin marketing region were added to the programming, out of 16 in the country.

Joplin offers access to a tri-state regional market, with three counties in southwest Missouri, three counties in southeast Kansas, and the city of Miami, Okla. “The ACT certified community process is great for existing employers and companies looking for new locations because they can see what the basic skills are in the region and the skills are validated,” O’Brian says.

Downing says the state is home to four counties that are Certified Work Ready Communities; nearly 40 counties in the state are in the process of becoming certified.

Down to Business

*No state is more perfectly centered than Missouri. Not only is the country’s population center located in Missouri, the state is also within 600 miles of 52 percent of all U.S. manufacturing plants.

*According to the Tax Foundation, Missouri features the country’s sixth best property tax index; sixth best unemployment insurance tax index, and the eighth best corporate income tax index.

*With more than 3 million educated and skilled workers, the state’s employees exceed the entire populations of 20 states, including the surrounding states of Kansas, Arkansas and Nebraska.

Industries and Innovations

Expanding companies find Missouri’s assets such as certified workforces and a stable tax environment attractive for long-term investments. At the international auto show held in Detroit in January, Missouri officials announced that the GMC Canyon will be made in Wentzville, in the St. Louis metro region. General Motors produces the Chevy Colorado at the plant. The new product line will bring 1,600 new jobs to the region, as well as a $500 million investment.

In the western part of the state, in the Kansas City metro, Ford Motor Co. will produce the new aluminum version of the F-150, the best-selling pickup truck in the country. The company is also producing the Transit Connect, which is a commercial vehicle.

The expanding OEMs have attracted an influx of auto suppliers to Missouri, adding 1,500 jobs in the past 14 months. Auto suppliers attracted to the Kansas City metro can supply Ford or GM. The supplier projects range from 50,000 square feet to several thousand square feet, and from 50 jobs to several hundred jobs, says Bob Marcusse, president and CEO, Kansas City Area Development Council (KCADC).

In other project activity, a redevelopment project in Kansas City is gaining national attention. The project has a 10-year ramp up schedule, expecting to add 15,000 new jobs to the Kansas City metro. The first facility, which expects to support 1,500 new jobs, should be complete in 30 months. The project is for the Cerner Corp., a health software company, and is the largest project in state history, Downing says.

The state of Missouri focuses on a variety of industry sectors, including advanced manufacturing; biosciences; energy; financial and professional services; health sciences and services; IT, and transportation and logistics.

“We are a good central location from which to operate,” O’Brian says. “We offer ease of transportation. Interstate 44 connects the Midwest to the Southwest; and the new I-49 runs from Kansas City to Arkansas, and will eventually extend to New Orleans.”

The Joplin region is well centered to support the food processing industry, providing access to raw materials and ease of shipping. Joplin is also attracting animal food companies. This spring Heartland Pet Food Manufacturing will open in Joplin. In addition to human and pet food processing, the region features the supply chain to support these efforts, including food-grade packaging companies.

Logistics related activities do well in the Kansas City metro. The Kansas City Southern Railway has opened an intermodal facility in the southern part of the metro. What’s more, Marcusse says the CenterPoint Logistics Park is under construction with a 300,000-square-foot facility at the site.

In regard to advanced manufacturing activities in the state, in Joplin, a history in transportation equipment has fostered a machining and metal fabrication cluster. “We have several companies that can supply class A component pieces for trucks, SUVs; and some companies here are heavily engaged in aerospace,” O’Brian says. In Kansas City, the aviation services cluster is gaining traction. A recent announcement for space at the former TWA MRO facility comes from Aviation Technical Services, based in Everett, Wash. The company will create 600 jobs at the facility, which is located near the Kansas City International Airport. Marcusse says the company intends to take 2.1 million square feet of space for their maintenance operations, eventually employing 1,000 people.

Talent and Education

In addition to the workforce certification efforts underway at the state level, STEM-related industries will find innovative programs such as the Missouri Innovation Campus, which encourages high school juniors and seniors to take college classes. The campus is a partnership effort of the University of Central Missouri in Warrensburg, Cerner Corp. and other technology companies in the Kansas City region. In addition to taking college classes, students conduct internships with technology companies such as Cerner. “Once out of high school, the students can finish college in three years and [they] have work experience,” Downing says.

In regard to workforce developments in the animal health cluster, an investment forum in Kansas City brought in 12 companies from five countries to present to 30 investment firms. “What we are seeing coming out of that are licensing agreements, direct investments, and business to business relationships,” Marcusse says. “It confirms not only are mature companies in the animal health space focused in Kansas City, we are creating the necessary infrastructure to support emerging companies.”

Outdoors and Recreation

With more than 50 state parks and wildlife areas, Missouri has more forested land than its neighboring states of Iowa, Illinois, Kansas and Nebraska combined. Resources include 22 underground formations, the Lake of the Ozarks, Table Rock Lake, and the Katy Trail State Park, a 225-mile rails to trails project.

Assets

The KCADC is also contributing to the growing entrepreneurial vibe. In the first ever Reverse Pitch, done under the KCnext brand, five mature firms presented their tech challenges and problems to 220 entrepreneurs to develop solutions. The activity took a different approach to the process where typically small tech entrepreneurs make pitches on their products and services to large companies or angel investors.

Marcusse says Kansas City has always had an active entrepreneurial community, which has been bolstered by the rollout of Google’s ultra-high speed Internet in the metro area. In addition to assets such as the Kauffman Foundation and the Bloch School of Business at the University of Missouri at Kansas City, which focuses on entrepreneurship, the presence of Google Fiber is breathing new life into startup efforts. Marcusse says companies want to create businesses that take advantage of something in Kansas City that is not available in other parts of the country.

Downing says the state’s economic development officials are getting their message across to business, as evidenced by the fact that the state was ranked among the top 10 in terms of employment growth in 2013. In addition, businesses find Missouri offers a stable business environment, with low tax rates and Triple A bond ratings from the rating agencies. What’s more, the state government can’t raise taxes without taking a vote, which provides security to companies.

“The state is aggressive and at the local level the government moves quickly and efficiently with building permits, utility connections and those things that need to happen to get business on the ground,” O’Brian says.

Lifestyle

In regard to livability, in Kansas City, Marcusse says officials will focus on lifestyle and livability issues because companies need not only business amenities but also cities that will act as magnets for talent. Along those lines, downtown Kansas City is attracting residential investments. The Cordish Co. will complete a 25-story luxury apartment building in 2015; following it will be three more apartment structures. “We are seeing a lot of growth in downtown living in Kansas City and that is a positive trend for the future,” Marcusse says.

More Info

Missouri Department of Economic Development