Monday Business Briefing: Yum’s future in Louisville, Spanish company makes big local investment, Bazo’s mysteriously closed, and more
Welcome to the Nov. 2 Monday Business Briefing, your private business intelligence digest from Insider Louisville.
Could Yum! Brands be looking to move its headquarters?
Since Yum! Brands Inc. announced plans to spin off its China division, Insider Louisville has been hearing whispers and receiving tips suggesting Yum! might move its headquarters.
In response, IL reached out to an expert at the University of Kentucky to talk about why the global fast-food brand would move vs. what makes Louisville a good place for a corporate headquarters.
First a little background: Yum! has been headquartered in Louisville since its creation in 1997. Then called Tricon Global Restaurants Inc., Yum! was created when PepsiCo spun off its restaurant businesses.
Today, there are about 1,000 Yum! and KFC employees in Louisville, according to the company. Yum! spokeswoman Virginia Ferguson said no layoffs are expected locally as a result of the China spin-off since the division’s executives and employees live in China.
“However, as always, we will continue to offset costs and evaluate ongoing opportunities to achieve greater efficiency,” she wrote in an email.
“The separation into two strong publicly traded companies (Yum! Brands and Yum! China) will allow both businesses to match their distinct management, infrastructure and resources to the potential opportunities ahead,” she added.
(Update: In a follow-up email received several hours after this story was published, Ferguson added: “Yum! Brands is committed to Louisville and we’re going to continue to invest in our hometown and make it a great place for our employees and their families.”)
Now back to business expert Kenneth Troske, senior associate dean of UK’s Gatton College of Business and Economics.
“Businesses do things for one reason: to increase profits,” Troske told IL.
If Yum! were to move, they’d have to consider the cost — the cost of property, labor costs, state taxes and actual moving costs, among other factors, he said.
Louisville is located centrally, which has attracted large operations such as Amazon and UPS. It also has a low cost of living.
But Kentucky as a whole doesn’t have many national headquarters because it’s a manufacturing state, Troske said. It also doesn’t have enough skilled workers to fill high value-added jobs.
“Right now, that is what holds us back,” he said. “We are not making ourselves look particularly attractive.”
Kentucky ranks in the middle of the pack among states when it comes to having a business-friendly climate, Troske said, and government policies that add red tape don’t help.
“Louisville didn’t help themselves by setting a local minimum wage,” he added.
Although KFC and Yum! are located here, Pizza Hut, Pizza Hut’s global operations and KFC’s global operations are all located in Dallas, making it a possible candidate if Yum! was looking to move.
“It is seemingly easy to move it there,” Troske said, adding that Texas has a more educated workforce than Kentucky and a friendlier business climate. “It doesn’t seem like it would be that challenging.”
According to Forbes, Dallas is ranked the 15th best place for business and careers, 11th in job growth and 46th in education, in front of Louisville on all counts. However, Louisville does beat Dallas on cost of doing business, ranking 48th compared to Dallas’ 111th place.
Cost of living in Dallas is 3 percentage points higher than Louisville.
A Dallas headquarters might not be enticing for middle management employees, Troske said, and many would likely stay in Louisville and find other jobs, particularly if they have families.
Although Yum! is a large employer, it is not among the top 10 in Louisville. New companies or job growth at other companies such as UPS could help absorb that potential job loss.
“Louisville is not completely dependent on Yum! Brands,” he said, “so I doubt it would devastate Louisville.”
Spanish company to invest $13.7m in Louisville
A Spanish auto parts maker wants to invest $13.7 million in Louisville and create 200 jobs.
Grupo Antolin plans to lease a building and pay employees $22.75 per hour, including benefits, according to a filing with the Kentucky Economic Development Finance Authority. The agency has given preliminary approval for $4 million in tax incentives.
Grupo Antolin is based in Burgos, in north-central Spain, and produces overhead systems, doors and lights and other parts, according to its website.
The company generated sales of about $2.5 billion last year, with more than half coming from overhead systems.
Its largest customer, with 18.9 percent of revenues last year, is Ford Motor Co., which has a significant presence in Louisville. About half of GA’s sales go to Ford, Volkswagen and Renault-Nissan.
Two months ago, GA roughly doubled its size through an acquisition of Magna Interiors, a division of Aurora, Ontario-based Magna International. MI generates sales of about $2.4 billion annually.
Grupo Antolin now operates about 200 manufacturing operations and employs about 25,000.
The company could not be reached Friday.
The Kentucky Economic Development Finance Authority last week also gave:
- Preliminary approval of $100,000 in tax incentives to Harrisonville Equipment Co. The commercial roofing products distributor/manufacturer is considering cutting its costs by moving manufacturing operations from Harrisonville, Mo., to Louisville, where it already employs 29 Kentucky residents. Louisville would gain 22 employees, who would make an average of $15.50 per hour, including benefits.
- Final approval to tax incentives for two investments from Heaven Hill Distilleries. The company had said it would invest $10.2 million to restore its building in the Bourbon Row district and another $15.5 million to expand its barrel storage and aging operations to respond to increasing demand.
- Final approval to a tax incentive of $100,000 for a $3.9 million investment of steel manufacturer MISA Metal Processing, which added seven jobs to handle increased business. —Boris Ladwig
At least two veteran Courier-Journal staffers accepted a buyout package recently offered by parent-company Gannett. The offer applied to those aged 55 or older with at least 15 years of service.
The only editorial staffer we can confirm took the buyout is Jennie Rees, who’s been a turf writer at the C-J for 32 years. She’s been honored with multiple Eclipse awards and by the National Turf Writers Association, Kentucky Horsemen’s Benevolent and Protective Association, Kentucky Thoroughbred Owners and Breeders, and Maryland Jockey Club.
Rees posted on Twitter that she was excited to leave after a year where she covered Triple Crown winner American Pharoah.
IL confirmed via a newsroom source that writers Tom Loftus, Sheldon Shafer, Andrew Wolfson and Deborah Yetter — among others who were eligible — passed on the buyout.
However, over in the C-J’s marketing department, Nancy Jo Trafton, director of client strategy for Louisville, announced her buyout acceptance on Facebook:
So word is out. After nearly 29 years with Gannett, tomorrow is my final day at the Courier-Journal. I’ve had the privilege to work with some of the best marketers, journalists, editors and advertising reps in the business. I truly treasure every day that I’ve had over the years.
Five weeks ago I was offered the opportunity to reimagine and reinvent myself for the last phase of my career. I couldn’t pass up the chance to see what I would become, post-Gannett , and see where life will take me. So soon I will strike out alone, with new passions and hopes to help another organization to achieve new heights.
In other local media news… Business First announced that Lisa Benson would be its new editor. She is a 16-year veteran of American City Business Journals and has spent five years as the managing editor of the Cincinnati Business Courier.
Bazo’s downtown remains mysteriously closed
For several weeks, the Bazo’s Fresh Mexican Grill downtown has been closed, with no notice and indication of when it might reopen.
Multiple calls to Bazo’s owner Sanjay Sakaria have gone unreturned.
According to Louisville health department records, Bazo’s failed its most recent restaurant inspection on Sept. 25.
The restaurant received a 82 on its inspection because its refrigeration units were not properly maintained; potentially hazardous food was not kept at the proper temperature; its outside opening was not adequately protected from possible pests; lumber was being stored in the dry food area; and its wastewater was not disposed of in an appropriate manner, according to city records.
Bazo’s was not required to shut down because of the inspection, health department spokesman Dave Langdon told Insider Louisville.
Louisville accounting firm expands, to hire up to 10
A Louisville accounting firm is expanding – again, reflecting continued consolidation pressures in the industry.
MCM, at 462 S. Fourth St., provides accounting services for industries including manufacturing, construction and insurance.
MCM Founding Partner Diane Medley said that increasing local, state, federal and international regulations are creating bigger challenges for clients. Those clients, in turn, are expecting greater expertise from accounting firms, and many smaller firms cannot offer the breadth of advice that many clients want.
“Clients … want specialized expertise,” Medley told Insider Louisville.
Those demands are driving many smaller firms to look for bigger partners with a broader set of experts.
MCM, for example, has teams that focus solely on banking, health care or construction, Medley said.
She said the merger benefits both firms: CFS gains expertise through the Louisville firm, and MCM gets a greater presence in Cincinnati.
Medley said that CFS will merge its assets and clients into MCM for a stake in the Louisville company.
MCM’s 10 Cincinnati employees will join the CFS office, and Medley said she expects the new company to add up to 10 full-time positions.
The founding partner said the move fits well into MCM’s regional expansion approach.
MCM was created in 2010, when Chilton & Medley merged with Mountjoy & Bressler. In 2012, the firm expanded into Southern Indiana through the acquisition of McCauley Nicolas.
The Journal of Accountancy wrote last month that the industry is seeing a consolidation trend because firms are using mergers and acquisitions “to deal with succession, promote growth, and achieve other strategic goals.”
For example, Chicago-based accounting giant RSM, formerly named McGladrey, bought firms in San Francisco and Missouri in April. BDO, also based in Chicago, said in May that it had acquired St. Louis-based Stone Charlie & Co., adding 100 employees, including eight partners.
Medley said that MCM, the nation’s 86th-largest accounting firm, continues to look for expansion opportunities, especially in Nashville and Indianapolis, but will concentrate on integrating CFS before the next acquisition. —Boris Ladwig
Ford seeks experienced electricians
Ford Motor Co. wants to hire about 50 industrial electricians at its Kentucky Truck Plant.
Company spokesman Judd Templin said via email that the new hires would work on Ford trucks and SUVs and earn $32.64 with full benefits.
Ford, like many manufacturers across the country, is struggling to find enough applicants for open manufacturing jobs, particularly in skilled trades.
At a Louisville event last week, Chip Blankenship, president and CEO of GE Appliances, said the worker shortage has reached a “crisis” stage and is presenting major challenges for economic growth.
High schools in Kentucky and other states in recent years have bolstered their vocational education programs. Rising college tuition costs, stagnant wages and worker shortages in the manufacturing sector have effected a shift: Instead of trying to prepare all students for college, more schools are focusing on preparing students for various careers.
Manufacturers, too, have supported – with advice and money – schools’ efforts to expand their curricula.
About a year ago, Ford and United Auto Workers announced a $350,000 grant to bring teachers into the Louisville Assembly plant to give them a better understanding of the skills their students need. The grant was part of $1 million that Ford spent through its philanthropic arm to support education.
GE on Tuesday presented $150,000 to two area high schools that will use the money to expand their technical education programs.
Details on new jobs at Ford:
Ford is looking for electricians who have experience and/or training in:
- reading and comprehending hardwire and ladder logic prints.
- troubleshooting robotic systems and equipment (such as Fanuc, ABB, Kawasaki).
- programmable logic controllers (Allen-Bradley, Square D, Siemens, Beckhoff.)
- Servo controls and devices.
- Networks (Control Net, Device Net, Ethernet).
- Visualization (Panel View – WinCC).
Ford asked that qualified candidates send résumés to [email protected] —Boris Ladwig
Bingham Fellows announce four projects
Bingham Fellows is a program by Leadership Louisville that brings together a diverse group of leaders and has them work together on projects over the course of around 12 months.
This year’s Bingham Fellows’ theme is: “United We Stand, A new Model for How City Collaborates with State.” Louisvillians have long lamented the fact that Jefferson Country is underrepresented in Frankfort, so this class of Fellows is looking for ways to bridge that gap.
The projects are:
- Unite Kentucky — a broad statewide project to research Kentucky’s urban-rural divide to provide a foundation for better collaboration.
- The Common Wealth — a statewide partnership with Leadership Kentucky designed to build relationships, understanding and ultimately, united action.
- LOUIE (Louisvillians: Organized, United, Informed & Engaged) — a project to improve outcomes in Frankfort on issues important to Louisville voters by unifying the Jefferson County legislative delegation and improving constituent engagement.
- Grow Kentucky — a micro grassroots project designed to connect young people in urban and rural areas through credit-earning classroom farming projects.
Up-and-coming chef taking the helm at new Norton Commons restaurant
Former Asiatique sous chef Ming Pu will hold his first executive chef position at The 502 in Norton Commons.
Pu is the protege of prominent Louisville chef Peng Looi, a partner in Asiatique and August Moon. Looi also served as consulting chef for The 502 and handpicked Pu for the job, according to a Facebook post about the appointment.
When IL first wrote about The 502, it didn’t have a name yet, let alone a menu. Owners Jennifer Yarmuth Cheatham and Scott Cheatham described the restaurant and bar as a good place to catch a game or go on a date.
The menu, according to the Facebook post, will feature bar-style food with global influence, as well as steak, fish and pasta dishes.
FirstBuild’s webseries ‘Internet of Tiles’ finally launches first ep.
Ever since I met the ‘IoT’ crew over at FirstBuild, I’ve been anxiously awaiting the first episode. It’s taken a long dang time, but it was well worth the wait. It’s just as funny as it sounded like it was going to be.
Hosts Myles and Tim help guest Chris realize his dream of having a “connected hoodie”– a hoodie with a display that is controlled via the Internet.
(When they were testing it out live on Twitter, I made the hoodie display ask, “Why do nerds always wear hoodies?” I have yet to get a response.)
Entrepreneurial wunderkind Chris Bailey to speak at next Venture Connectors Luncheon
Revio co-founder and CEO Chris Bailey will be the featured speaker at this Wednesday’s Venture Connectors Luncheon. Bailey first earned startup fame with the product GearBrake. He’ll be sharing his experiences with various startup accelerators including Velocity and Techstars Mobile.
Bailey won the 2014 Venture Sharks competition and the statewide pitch competition last year. He’s a compelling speaker, and this topic is very important to Louisville right now with Velocity still in limbo.
The event is Nov. 4 at the Ali Center. Doors at 11:30 a.m. and the programming starts at noon. Tickets are $40. Reserve here. –Melissa Chipman