agna International doesn't like putting its various brand names on its plants, a habit in keeping with its close-to-the-vest style of doing bus iness. But when the Canada-based conglomerate of automotive companies comes to town, everybody knows it.
        Everybody in Kentucky certainly knew it when Magna Cosma, the company's metal forming division, made a pair of announcements in recent months, allocating US$132-million toward a 132-acre (53-hectare) site in Bowling Green, where the subsidiary will hire around 300 employees to make auto parts in a 920,000-sq.-ft. (85,468-sq.-m.) facility. Total employment could be as high as 1,100 eventually. As of September 2003, Magna employed approximately 72,000 people at 201 manufacturing divisions and 48 product development and engineering centers throughout North and South America, Mexico, Europe and Asia.
        Not a bad initial tenant for the city's long-simmering Trimodal Transpark, which is also seeing more federal funding for its infrastructure. Thanks to the efforts of U.S. Senate Majority Whip and senior Appropriations Committee member Mitch McConnell in 2003, the park garnered $7.25 million in January 2004, $5.25 million for access roads and interchange upgrades, and $2 million toward water and sewer improvements for tenants.
        Still in Bowling Green, Kobe Aluminum – a joint venture between Kobe Steel, Ltd., Mitsui & Co., Ltd. and Toyota Tsusho Corp. – is investing $32.7 million in a 108,000-sq.-ft. (10,033-sq.-m.) facility that will employ 78 in the manufacture of aluminum forgings for automobile suspension systems. Bowling Green also saw December 2003 expansion investments of $5 million from convertible roof top maker CTS and $6 million from printed label maker Renaissance Mark (which is adding 100 jobs), along with eight other manufacturing expansions in 2003. Over the past three years the town has achieved a city's stature in manufacturers' eyes, with 32 investments worth more than $394 million.
        All the more reason for new Gov. Ernie Fletcher to vaunt the state's continuing strength in a nation that is in the midst of a panic about its perceived weaknesses.
        "Rather than sit and whine about competition on the international market," Gov. Fletcher tells Site Selection in an exclusive interview, "what I want to do is focus on our assets, and provide economic development that's going to be competitive in the interstate and global economy."
        Yes, there have been setbacks in traditional manufacturing, Fletcher observes. In Kentucky those cuts have recently come at a Robert Bosch plant in Leitchfield and a Rohm & Haas plant in Louisville, among other locations. But advanced manufacturing and advanced services continue to invest, with Citigroup's Citi Cards division the latest to announce a major Kentucky investment, with plans to add some 1,600 jobs to its current payroll of 500 in Louisville, and to build a 170,000-sq.-ft. (15,793-sq.-m.) facility as part of a $38.5-million investment. The company cited as one reason behind the choice its succes sful 2,400-employee call center in the Northern Kentucky community of Florence.
        The Louisville investment, meanwhile, comes on the heels of Ford Motor Co.'s pledge to invest $73 million in its Louisville truck plant, even as the company cuts back at other U.S. plants., and General Electric's move of its Industrial Systems division to Louisville from Connecticut.
        "You always have to be versatile and changing in the new economy," says Fletcher, "and that's what we're doing."

Tax Versatility Too?

Chief among Fletcher's mandates has been a call for overall tax reform. That includes corporate and business tax "modernization." Asked about specifics, he says one big part of attracting job creators is the complete elimination of the corporate license tax, and another is reducing marginal rates from 8.5 percent to 6 percent.
        "We also have an initiative moving along – and I think we'll get it passed – called the Kentucky Enterprise Initiative," he says, "which offers a rebate on sales tax on hard construction costs. This will help stimulate expanding companies as well as companies moving to Kentucky."
        Just as important in Fletcher's view is the attraction of human capital, so he wants to simultaneously lower the individual income tax from 6 percent to 4.9 percent, eventually reaching around 4 percent.
        How can both occur at once? One key, he says, is to close some tax loopholes that have enabled LLCs and LLPs to avoid the corporate tax. Holding them harmless, in concert with the license tax removal and the marginal tax rate reduction, will roll many of them them into the corporate tax rolls as C corporations.
        Finally, pursuant to what he says was a major theme at this year's National Governors' Association conference in Washington, D.C., the Fletcher administration is backing some $400 million in educational projects, including technical education. Fletcher sees this as fitting in well with President George W. Bush's call for more community college and technical training.
        "That initiative is essential to compete in the global economy," says Fletcher. "When you look at the more complex environment, the asset we have is the technical training. When we recruit companies, work force is what they're looking for."
        And one need look no further than Magna for confirmation of that maxim.
        "When I spoke with Magna Corp., I promised support for the technical school right there on the site, and we put that in our budget," says Fletcher. "That's the right thing to do in recruiting companies."