Call to Order and Roll Call
The 1st meeting of the Interim Joint Committee on Economic Development and Tourism was held on Thursday, July 21, 2016, at 11:00 AM, at the National Corvette Museum in Bowling Green, KY. This was a joint meeting with the Interim Joint Committee on Labor and Industry. Senator Alice Forgy Kerr, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Alice Forgy Kerr, Co-Chair; Representative John Short, Co-Chair; Senators Perry B. Clark, Carroll Gibson, Chris Girdler, Denise Harper Angel, Ernie Harris, Wil Schroder, Reginald Thomas, and Mike Wilson,; Representatives Kevin Bratcher, George Brown, Tim Couch, Jim DeCesare, Jeff Donohue, Myron Dossett, Richard Heath, Dennis Horlander, James Kay, Kim King, Martha Jane King, Brian Linder, Terry Mills, Ruth Ann Palumbo, Dean Schamore, Arnold Simpson, Wilson Stone, Jeff Taylor, Tommy Thompson, Russell Webber and Jill York.
Guests: Wendell Strode, Executive Director, National Corvette Museum; Kai Spande, Plant Manager, General Motors Bowling Green Assembly Plant; and Kim Phelps, Vice President of Communication and Public Policy, Bowling Green Chamber of Commerce.
LRC Staff: John Buckner, Chip Smith, and Karen Brady.
Welcome and Introductions
Representatives Short, DeCesare, Stone, House Speaker Pro Tempore Richards, and Senator Wilson introduced guests and spoke about the Bowling Green area.
National Corvette Museum
Wendell Strode, Executive Director, National Corvette Museum (NCM), welcomed the committee and gave an overview of the museum including its history, programs, and facilities. In the mid to late 1980s, the idea of a Corvette Library was discussed by the National Corvette Restorers Society and a Museum at the Corvette Assembly Plant. Through the efforts of a task force created by the Bowling Green Chamber of Commerce, a museum annex opened in November 1990 and groundbreaking of the NCM began in June 1992. The grand opening of the NCM was September 2, 1994, and in 2009 there was a 47,000 square foot expansion completed. Each year the museum has approximately 220,000 visitors, sits on a 55 acre campus, has an 115,000 square foot facility, and has about 107 staff members.
The NCM offers various programs and services that are offered to the public with the mission of celebration, education, and preservation. One noted by Mr. Strode is the delivery program, which allows those who order vehicles at their local dealerships across the country to take delivery of their car at the NCM. Participants of the program get the opportunity to travel to Bowling Green to pick up their new Corvette while also being given VIP plant and museum tours. Last year about 1,100 customers partook in the unique experience. The museum houses the Corvette Museum Library and Archives, which stores the build sheets, or birth certificates, for all Corvettes manufactured at the Bowling Green Assembly Plant. Also, in recent years, the NCM started their own insurance agency for collector cars and serves individuals across the U.S. Visitors to the museum also get the opportunity to purchase items at the Corvette Store, which averages about $4 million in sales annually, and dine at the Corvette Café. Also offered are Museum in Motion Tours which take people to places such as Michigan, Florida, and France. Other programs include the science and education themed exhibits and the National Corvette Caravan.
Mr. Strode went on to expand on the Motorsports Park, which opened in 2014, is owned and managed by the NCM, which is a 501 (c) (3) nonprofit foundation, and was a $25 million project. The park includes two road courses, 3.15 miles in length, and has multiple configurations with 23 turns. There is a 21 acre paddock, autocross, and skid pad area along with a control tower, administrative building, fueling station, garages, and a pavilion. The first year of operation the park had 130,000 visitors, and currently 85 percent of park participants are from out of state with most spending at least two nights in Bowling Green. Forty percent visit other attractions in the area such as the NCM, the General Motors Assembly Plant, Lost River Cave, and Mammoth Cave. The NCM sponsors High Performance Driver Education events at the park that allow a person to learn, practice, and apply advanced car control skills. The park also offers track rentals to companies, car clubs, and motorcycle groups; corporate team building and hospitality events; math and science educational programs; teen driver safety; emergency response training; and Kentucky State Police training. In 2015 the Motorsports Park hosted events for Michelin, Ford, the Bowling Green Chamber of Commerce, Corvette Racing, and Nissan NISMO just to list a few.
On February 12, 2014, at 5:39 a.m., a security alarm began to go off at the NCM, and once two staff members entered the facility they saw what appeared to be smoke, prompting them to call the fire department. Inside the Skydome a sinkhole had formed and consumed eight rare cars that were on display including a ZR1 Blue Devil, a 1993 40th Anniversary Corvette, a 1962 Corvette, the Millionth Corvette, a PPG PaceCar, a ZR-1 Spyder, the 1.5 Millionth Corvette, and a 2006 Z06 Mallett Hammer. The NCM wanted to be as open and transparent with the media and public as possible, releasing updates online, sending press releases, and conducting press conferences. It allowed the media to film and photograph the sinkhole and the damage that had been done. The Skydome Sinkhole became a media sensation, and the story was picked up by major media outlets across the nation and worldwide. The NCM took advantage of the attention and did not immediately fill the hole, instead opting to leave it on display, increasing their number of visitors by 67 percent in 2014. The Skydome Sinkhole has since been filled with all eight cars back on display, some still in their damaged condition while others have been restored. The Corvette Cave In Exhibit opened in February 2016 and allows visitors to learn more about the sinkhole and how the NCM recovered from the unfortunate events. Mr. Strode closed by informing the committee that the NCM and the NCM Motorsports Park have an estimated $40 million economic impact on the surrounding region and an additional $10 million statewide.
Responding to Representative DuPlessis, Mr. Strode stated that the cost of the High Performance Driver Education program is $495.
General Motors Bowling Green Assembly Plant
Kai Spande, Plant Manager, General Motors Bowling Green Assembly Plant, discussed the GM Assembly Plant’s operations, products, and recent expansion. The plant is approximately one million square feet on 212 acres with production being done on first shift only Monday through Friday. The production volume is 17.2 units per hour or 137 per day with approximately 1,000 salary, hourly, and contract employees. Between March 2012 and September 2013 370 permanent GM-UAW employees from Michigan, Ohio, Indiana, Missouri, Louisiana, and Texas transferred to the Bowling Green GM Assembly Plant with 24 salaried positions being added. During the last six months at the plant there have been several labor transitions. About 135 employees have transferred to Spring Hill or moved to other GM sites, 75 employees retired, and 49 temporary employees have been converted to full time. Employees from the local area were hired to backfill some of the positions of those that transferred or retired.
Mr. Spande detailed the different types of Corvettes manufactured at the plant including the Stingray and Z06, both of which can either be made as a coupe or convertible. The 2017 Corvette Grand Sport is currently in production, which can also be made in either coupe or convertible. He then detailed the different types of engines including the LT4 6.2L V-8 for the Z06 and the LT1 6.2L V-8 for the Stingray and Grand Sport. All engines for the vehicles are built by hand by an assembly technician, although some customers are given the option to come to the plant to build their own engine by paying an additional $5,000 fee. By purchasing the Engine Build Experience package, a customer can work under the supervision of an assembly technician and receive a personalized engine plaque identifying him or her as the builder.
Recent and ongoing investments have been made to ensure the assembly plant remains here in the state and continues to thrive. There has been a $440 million investment made in the new state of the art paint shop, which should be complete in late 2017 and begin working with 2018 model vehicles. Another investment of $44 million was made in spring 2016 to support the new powertrain assembly operations and for some related future yet unannounced programs. There was also $2 million invested in the new solar array, which according to Mr. Spande may be one of the largest in the state. In addition, on June 23, 2016 the announcement was made that $290 million is being invested in ongoing process improvements that will ensure the plant remains viable.
After a question from Representative Palumbo, Mr. Spande explained there are 10 basic paint colors, with white, red, and black being the most popular; however, there are three to four paint color changes and variations of those basic colors made annually.
Responding to Representative Donohue, Mr. Spande stated that although the vehicle engines are built by hand by one person from the ground up, all of the components are shipped to the assembly plant separately and no machining of parts is done at the plant. Answering a follow up question, he said that he believes the plant has a good relationship with the UAW and recent negotiations went well.
Representative Thompson requested that Mr. Spande expand on the composition of the materials used for the Corvettes and inquired about the use of aluminum. He explained that the complete body structure or the chassis is made of aluminum and manufactured in Bowling Green. There are currently no steel parts in the Corvette. The exterior panels are composed of high tech plastic injection molded parts, while the hoods and roofs are comprised of carbon fiber material that comes from a facility in Michigan.
Addressing Representative Riner, Mr. Spande affirmed that while the Corvette can be equated to the Porsche 911 as far as racing, the Ford Mustang is of no comparison.
Claudia Hanes, a resident of the Bowling Green Area, thanked Mr. Spande for the new solar panels and inquired about the assembly plant’s hiring process and requirements for production workers. He said that the GM Assembly Plant hires a third party to assist with their vetting process, including things such as drug testing and mathematical and reasoning assessments. Next, candidates are put into a pool and chosen at random. Those who are chosen for employment are trained on safety and operations and are paired with someone to do job shadowing.
Bowling Green Chamber of Commerce
Kim Phelps, Vice President of Communications and Public Policy, Bowling Green Chamber of Commerce, gave a presentation entitled Central for Business, Southern for Living. According to her presentation, of the employers in the South Central Kentucky region, 88 percent report limited access to skilled workers as a barrier to expansion, 74 percent are concerned about maintaining a skilled and motivated workforce, 67 percent cannot find skilled candidates for critical positions, and 63 percent worry about the employability and work ethic skills of available candidates. It is estimated that the region will need 4,500 workers by the end of 2016 and over 9,000 by the end of 2020 to fill middle-skill production, maintenance, management, and engineering positions due to retirements and new job growth. Ms. Phelps noted that there is a new Local Workforce Development Board seated under the Workforce Innovation and Opportunity Act. She mentioned the Wagner-Peyser Funded Activities, which is a state funded pilot project.
Ms. Phelps said that the Bowling Green Chamber of Commerce is the voice of the business community and play a vital role in assuring businesses are provided with a well-trained talent pipeline that will propel success and growth. In an effort to repair some of the workforce issues in the area, the chamber has identified six sectors with the highest potential for growth in the South Central Kentucky region, which include healthcare; hospitality; professional services; construction; manufacturing; and transportation, distribution, and logistics. Identified for each sector are the top ten positions in terms of demand over the next ten years, average annual salary, and career pathways. All of the information gathered was validated by businesses in a one day summit on talent. As a result, the South Central Kentucky Launch (SCK Launch) talent development strategy has been established that begins at the earliest stage of kindergarten to unemployed, underemployed, and incumbent workers already in the system.
In 2011, the chamber raised $1.4 million to implement The Leader in Me in Bowling Green and Warren County Schools in grades kindergarten through 12th grade and is the first in the nation to focus on leadership infusion in the grade span. The program has been extremely successful and already has six Lighthouse schools with more to come online this year. Once a child reaches middle school, the focus shifts to career and interest exploration. On November 9 and 10, 2016 the SCK Launch Experience will take place, which will be a hands on career expo to expose students career pathways that are in high demand. Beginning in 2017, students will be given the opportunity to participate in the Leadership Infused Career Immersion program that combines Covey principles with career academy concepts and will include a partnership with the Ford Next Generation Learning Education initiative. This will be a national model with the goal to graduate 100 percent of students with some form of job experience.
There are several other upcoming initiatives in the Bowling Green area. One program is the On Track project based learning initiative that teach STEM disciplines through practical application while exposing students to manufacturing careers. Through the program, the Warren County Area Technology Center and the South Central Kentucky Community and Technical College (SKYCTC) were each given a 1981 Camaro to rebuild for competition at the 2016 Holley LS Fest. The On Track initiative just received a $70,000 grant from the LIFT organization for next year to help focus on the use of lightweight metals and materials. Another initiative is the machine tool and robotics program that will accommodate 80 students and offer dual credit and certification upon completion. The Bowling Green Economic Development Association has donated funds, the Sun Products Corporation has donated equipment, and SKYCTC will provide instructors that will be paid by the Warren County School System. Individuals that are unemployed, underemployed or incumbent workers are offered training and other resources through the Training Consortium of South Central Kentucky, the Manufacturing Career Center, and the program Team Workforce. Team Workforce is a monthly gathering of public workforce partners that offers a “career connection” event to assist people with barriers to employment, resumes, and skill training.
Representative Palumbo commended Speaker Pro Tempore Jody Richards for his continuous promotion of economic development in not only Bowling Green but the South Central Kentucky region.
In response to Senator Thomas, Ms. Phelps stated that the Bowling Green Chamber of Commerce has done leadership visits in various places, and the SCK Launch experience is the result of the most recent visit to Pensacola, FL, Mobile, AL, and the general Gulf area. In 2014 in an unofficial leadership trip, some individuals from the Bowling Green area visited Virginia to explore the motorsports industry.
Senator Wilson expressed his excitement about the machine and robotics program and the collaboration amongst the business community, the school systems, and the chamber that allows students to graduate from high school with work ready skills and certification in various areas. Senator Wilson also mentioned that the legislators had recently been briefed at the Southern Legislative Conference on the Every Student Succeeds Act, which allows for more innovation and creativity at the local and community level.
Representative Clark stated he had been working with Dr. Carl Rollins, Executive Director of the Kentucky Higher Education Assistance Authority, in an effort to make Kentucky Educational Excellence Scholarship (KEES) funds available to students for vocational training. He also pointed out that all students in Hardin County graduate with a Work Ethics Certificate.
There being no further business before the committee, the meeting was adjourned at 1:03 p.m.